Benzinga Market Primer, Monday July 22

Futures Higher Following Japanese Elections

U.S. equity futures rose in early pre-market trade following a positive result from the Japanese elections for the upper house of Parliament over the weekend. The elections now giver Primer Minister Shinzo Abe a majority in both houses and should pave the way for more policy changes and economic reforms to be passed.

Top News

In other news around the markets:

• UBS (NYSE: UBS) reported second quarter results overnight and shares rose after the bank posted net income of 690 million Swiss francs, besting the forecast of 586 million francs.


• The G20 issued their communique following their weekend meetings and stressed growth over austerity and targeting fiscal consolidation over the medium-term.


• Portugal's President Cavaco said that the country failed to reach an agreement on a new ruling coalition and the country now looks set to go back to the polls. Should the current regime lose its majority, it could disrupt bailout reforms and throw in doubt Portugal's future within the Eurozone.


• S&P 500 futures rose 8.9 points to 1,689.50.


• The EUR/USD was higher at 1.3162.


• Spanish 10-year government bond yields were flat at 4.68 percent.


• Italian 10-year government bond yields were flat at 4.41 percent.


• Gold rose 1.76 percent to $1,316.80 per ounce.

Asian Markets

Asian shares were mostly higher in overnight trade following positive results from the Japanese elections. The Japanese Nikkei 225 Index rose 0.47 percent and the Hang Seng Index gained 0.25 percent while the Shanghai Composite Index rose 0.61 percent. Also, the Korean Kospi gained 0.48 percent and Australian shares rose 0.6 percent.

European Markets

European shares were mostly higher overnight following strong earnings and positive sentiment out of Asia. The Spanish Ibex Index rose 0.55 percent and the Italian FTSE MIB Index gained 0.71 percent. Meanwhile, the German DAX gained 0.34 percent and the French CAC 40 Index rose 0.3 percent as U.K. shares rose 0.12 percent.

Commodities

Commodities were mostly higher overnight as precious metals rallied and gold crossed back above $1,300 per ounce. WTI Crude futures rose 0.43 percent to $108.51 per barrel and Brent Crude futures gained 0.28 percent to $108.34 per barrel. Copper futures rose 0.92 percent to $316.90 per pound. Gold was higher and silver futures rose 2.24 percent to $19.90 per ounce.

Currencies

Currency markets were on the move overnight with the yen strengthening. The EUR/USD was higher at 1.3162 and the dollar fell 0.64 percent against the yen to 100.01. Overall, the Dollar Index fell 0.26 percent on weakness against the yen, the Swiss franc, and the Canadian dollar.

Earnings Reported Yesterday

Key companies that reported earnings Friday include:

• General Electric (NYSE: GE) reported second quarter EPS of $03.36, in line, on revenue of $35.12 billion vs. $35.58 billion expected.


• Slumberger (NYSE: SLB) reported second quarter EPS of $1.15 vs. $1.19 expected on revenue of $11.18 billion vs. $11.11 billion expected.


• Honeywell (NYSE: HON) reported second quarter EPS of $1.28 vs. $1.21 expected on revenue of $9.69 billion.
• ManpowerGroup (NYSE: MAN) reported second quarter EPS of $1.05 vs. $0.89 expected on revenue of $5.04 billion vs. $4.99 billion expected.

Pre-Market Movers

Stocks moving in the pre-market included:

• UBS (NYSE: UBS) shares rose 4.51 percent pre-market as the company reported better than expected earnings.


• Credit Suisse (NYSE: CS) rose in sympathy with UBS, gaining 2.43 percent pre-market.


• Newmont Mining (NYSE: NEM) shares rose 2.75 percent pre-market as metal prices bounced.


• Goldcorp (NYSE: GG) shares gained 1.5 percent pre-market on higher gold prices.

Earnings

Notable companies expected to report earnings Monday include:

• Halliburton (NYSE: HAL) is expected to report second quarter EPS of $0.72 vs. $0.80 a year ago.


• McDonald's (NYSE: MCD) is expected to report second quarter EPS of $1.40 vs. $1.32 a year ago.


• Kimberly-Clark (NYSE: KMB) is expected to report second quarter EPS of $1.39 vs. $1.30 a year ago.


• Texas Instruments (NASDAQ: TXN) is expected to report second quarter EPS of $0.41 vs. $0.44 a year ago.

Economics

On the economics calendar Monday, the Chicago Fed National Activity Index is due out followed by existing home sales and the weekly 3- and 6-month bill auctions.

Good luck and good trading.

Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.

For a recap of Friday's market action, read Benzinga's daily market wrap here.