Benzinga Market Primer, Thursday October 4
U.S. equity futures rose in early Thursday trading as Presidential Candidate Mitt Romney impressed markets at the first debate, sending futures higher. Also, strong auctions in Spain and France showed that Spain may not yet be frozen out of credit markets.
In other news around the markets:
- The stronger than expected jump in the ISM Non-Manufacturing Index reported Wednesday, which encompasses approximately seven-eighths of the U.S. economy, rose significantly in September, pointing to a potential uptick in Q3 GDP growth for the U.S.
- Spain sold 3.992 billion euros of 2-, 3-, and 5-year bonds with yields falling across the board. The total amount raised was near the top end of the target range of 3-4 billion euros.
- Foreign Exchange volumes were seen dropping some 39 percent in September, but given all of the macro uncertainty surrounding a Spanish bailout, China's slowdown, and the U.S. election and fiscal cliff, investors could be waiting for more clarity.
- S&P 500 futures rose 3.5 points to 1,448.20.
- The EUR/USD rose back to 1.2935 after dropping near 1.2900 Wednesday.
- Spanish 10-year government bond yields rose to 5.85 percent.
- Italian 10-year government bond yields rose to 5.099 percent.
- Gold rose 0.47 percent to $1,7888.10 per ounce.
Asian shares were mostly higher overnight, led by Japan. The Japanese Nikkei Index rose 0.89 percent while the Hang Seng Index rose 0.09 percent. Australian shares also rose, gaining 0.31 percent overnight, while Korean shares, as measured by the Kospi Index, fell 0.17 percent. European shares traded lower across the continent as Spanish bond yields rose and markets awaited the interest rate decision from both the ECB and the Bank of England. Spain's Ibex Index fell 0.12 percent and Italy's MIB Index slipped 0.48 percent. Core stocks were also seen lower, as the German DAX fell 0.31 percent and the French CAC fell 0.36 percent. U.K. shares slipped as well, with the FTSE 100 Index dropping 0.25 percent.
Commodities were mildly stronger in early Thursday trading following the large drop Wednesday, led by a drop in crude oil on news from the Department of Energy that U.S. production grew more than expected last month. WTI Crude futures rose 0.32 percent to $88.42 per barrel but still remain below the $90 level and Brent Crude futures rose 0.57 percent to $108.75 per barrel. Copper futures rose in early trade, gaining 0.26 percent to $379.40 per pound. Gold was higher and silver futures gained 0.69 percent to $34.93 per ounce.
Currency markets seemed to be easing pressures on the Aussie dollar in overnight trading, as the currency failed to weaken to new lows following the unexpected rate cut from the nation's central bank earlier this week. The EUR/USD was slightly higher, but truly has just returned to levels that greeted traders this time yesterday, and the dollar rose against the yen. The AUD/USD regained the 1.02 level and seems to basing there while the EUR/AUD seems to have topped out near 1.2660. Currency markets have been very quiet ahead of all of the central bank action today.
Stocks moving in the pre-market included Carnival Corporation (NYSE: CCL), which rose 1.94 percent after having its price target increased earlier this week by Morgan Stanley analysts. Hewlett-Packard (NYSE: HPQ) gained 0.74 percent following Wednesday's massive drop to a 9-year low as the company slashed guidance for its fiscal year 2013. Weyerhaeuser (NYSE: WY) shares dropped slightly by 0.08 percent in pre-market trading despite a positive seekingalpha article highlighting the stock as one that famed manager David Tepper would support.
Notable companies reporting earnings Thursday include:
- Gladstone Capital (NASDAQ: GLAD) is expected to report quarterly EPS of $0.24 vs. $0.23 a year ago.
- International Speedway Corp. (NASDAQ: ISCA) is expected to report quarterly EPS of $0.08 vs. $0.24 a year ago
On the economic calendar, the Bank of England is expected to make its interest rate decision at 7 am and the ECB's interest rate decision at 7:45 am. Investors will then receive lots of data on various economic sectors Thursday. Weekly jobless claims and factory orders highlight the early morning data, followed by the FOMC minutes in the afternoon and a Treasury STRIPS auction. Also, the Fed's James Bullard speaks at 7:30 pm at the Economics Club of Memphis.
Good luck and good trading.
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