Benzinga Market Primer, Monday July 15

Futures Rise Despite Weak China GDP

U.S. equity futures gained in early pre-market trade despite weak GDP data from China. China reported second quarter GDP grew 1.7 percent in the quarter, worse than the expected 1.8 percent growth rate. However, the annualized figure posted at 7.5 percent growth, in line with forecasts.

Top News

In other news around the markets:

• Other Chinese data released overnight included the industrial production, retail sales, and fixed asset investment reports. Industrial production and fixed asset investment both grew less than expected in June while retail sales outpaced expectations.


• Barclays issued a note overnight and now sees the Fed tapering asset purchases in September, which is in line with market expectations. They did note that they expect uncertainty over the Fed to continue to mount but note that rate hikes are still very far off on the horizon.


• After the close Friday, AT&T T announced its intention to acquire Leap Wireless LEAP for $15 per share in cash plus the proceeds of the sale of bandwidth in Chicago.


• S&P 500 futures gained 3.5 points to 1,673.80.


• The EUR/USD was lower at 1.3033.


• Spanish 10-year government bond yields rose 4 basis points to 4.82 percent.


• Italian 10-year government bond yields rose 4 basis points to 4.53 percent.


• Gold rose 0.25 percent to $1,280.80 per ounce.

Asian Markets

Asian shares were higher overnight on the back of the China data despite Japanese markets being closed for a holiday. Chinese shares were higher as the Shanghai Composite Index rose 0.98 percent and the CSI 300 Index gained 1.4 percent while the Hang Seng Index in Hong Kong rose 0.12 percent. Also, the Korean Kospi gained 0.28 percent and Australian shares gained 0.15 percent.

European Markets

European shares were higher overnight on little news. The Spanish Ibex Index rose 0.12 percent and the Italian FTSE MIB Index gained 0.73 percent. Meanwhile, the German DAX rose 0.5 percent and the French CAC 40 Index gained 0.71 percent while U.K. shares added 0.68 percent.

Commodities

Commodities were mixed overnight as oil prices dropped. WTI Crude futures fell 0.24 percent to $105.70 per barrel and Brent Crude futures declined 0.02 percent to $108.79 per barrel. Copper futures fell 0.63 percent to $313.50. Gold was higher and silver futures were flat.

Currencies

Currency markets were on the move as dollar strength was seen nearly across the board. The EUR/USD was lower at 1.3033 and the dollar gained against the yen to 99.79. Overall, the Dollar Index rose 0.25 percent on strength against the yen, the Swiss franc, the pound, the euro, and the Canadian dollar.

Earnings Reported Yesterday

Key companies that reported earnings Friday include:

• Infosys INFY reported first quarter EPS of $0.73 vs. $0.70 a expected on revenue of $1.99 billion vs. $1.95 billion.


• J.P. Morgan Chase & Co. JPM reported adjusted second quarter EPS of $1.45, in line, on revenue of $25.12 billion vs. $25.73 billion expected.


• Wells Fargo WFC reported second quarter EPS of $0.98 vs. $0.93 on revenue of $21.4 billion vs. $21.16 billion.


• United Parcel Service UPS pre-reported second quarter EPS of $1.13 vs. $1.20 expected.

Pre-Market Movers

Stocks moving in the pre-market included:

• Leap Wireless LEAP shares gained 116.92 percent pre-market to $17.31 per share as the market tries to value the bandwith that is to be sold to estimate the total takeover price.


• Citigroup C shares gained 0.33 percent heading into its earnings report after a positive mention in Barron's.


• Boeing BA shares gained 1.72 percent pre-market as markets believe that the Ethiopian Air incident that saw a 787 catch fire was most likely an accident and not the company's fault.

Earnings

Notable companies expected to report earnings Monday include:

• Citigroup C is expected to report second quarter EPS of $1.18 vs. $1.00 a year ago on revenue of $19.79 billion vs. $18.64 billion a year ago.


• Gardner Denver GDI is expected to report second quarter EPS of $1.28 vs. $1.53 a year ago on revenue of $561.49 million vs. $613.01 million a year ago.


• Wynn Resorts WYNN is expected to report second quarter EPS of $1.58 vs. $1.38 a year ago on revenue of $1.34 billion vs. $1.25 billion a year ago.

Economics

On the economics calendar Monday, the monthly retail sales report and the Empire State Manufacturing Index are due out as well as the business inventories report. Also, the Treasury is set to hold the weekly auction of 3- and 6-month bills. Overnight, the RBA minutes and the German ZEW Economic Sentiment Index are expected to be released.

Good luck and good trading.

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

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