Benzinga Market Primer, Friday July 13

U.S. equity futures rose early Friday following Chinese GDP data. China reported that the economy grew 7.6 percent in the second quarter on an annualized basis. Economists had been expecting this number, however rumors had the "whisper number" much lower near 7.4 or 7.5 percent. This is the slowest pace of growth since 2009. Also, stocks await the earnings releases from JP Morgan Chase JPM and Wells Fargo WFC.

The top headlines this morning were:

• U.S. equity futures rose. S&P 500 futures were up 4.6 points to 1334.76 and NASDAQ futures rose 8.25 points.


• Moody's downgrades Italy two notches to Baa3 from A3 citing a deteriorating near term economic outlook.


• Spanish banks' borrowing at the ECB rose in June to 365 billion euros from 324.6 billion euros in May.


• Chinese industrial production rose 9.5 percent year-over-year missing economist forecasts of a 9.8 percent rise.


• Italy sold 3.5 billion euros of 3-year bonds with yields falling to 4.65 percent from 5.3 percent on strong demand.


• China's PBOC 2012 Stability Report hints at further rate cuts throughout the rest of 2012.


• Spanish 10-year yield 6.683 percent, Italian 10-year yield 6.01 percent.

Overnight, Asian shares rose on positive sentiment from the Chinese GDP report. South Korea's Kospi Index rallied 1.54 percent on the strong data and Bank of Korea rate cut. However, major indexes such as the Nikkei and the Shanghai Composite were only marginally higher at the close. European shares were largely higher as well except fro Spanish and Italian stocks. Spain's Ibex fell 0.02 percent and Italy's MIB fell 0.18 percent on the Moody's downgrade.

Commodities rose on the positive sentiment as well. Front month WTI crude futures rose 0.71 percent to $86.69 per barrel and front month Brent crude futures 1.00 percent to $102.08 per barrel. Copper futures rose 1.57 percent to $346.85 per pound and gold futures rose 0.88 percent to $1,579.00 per ounce. Silver futures rose as well.

The dollar was marginally weak measured by the dollar index, which fell 0.06 percent to 83.61. The EUR/USD, which comprises more than 50 percent of the dollar index, was effectively flat and continued to trade in the 1.2175/1.2200 range after breaking below 1.22 for the first time in nearly two years on Thursday. The USD/JPY also traded lower and closed in on the 79 level.

On the economic front, the calendar is rather light. U.S. inflation data is due out at 8:30 am est. Economists are anticipating that PPI inflation rose 0.2 percent in June from May and that core PPI inflation rose 2.6 percent from one year ago. PPI inflation had risen 0.7 percent in May and core PPI had risen 2.7 percent annualized. University of Michigan Consumer Sentiment data is due out at 9:55 am est, with economists expecting a reading of 73.4 from the previous 73.2. Lastly, the Fed's Dennis Lockhart is set to speak at 1:20 pm.

On the earnings front, JP Morgan Chase is expected to report earnings before the open. Consensus EPS is for $0.76 per share as compared to last year's $1.27 per share. Investors should watch to see the effect of the Debt Valuation Adjustment on earnings and also for CEO Jamie Dimon's comments on the trading loss. Wells Fargo is also set to report and consensus estimates are looking for EPS of $0.81 per share as compared to last year's $0.70 per share.

Good luck and good trading.