Market Overview

Benzinga Market Primer, Wednesday August 22

Benzinga Market Primer, Wednesday August 22
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U.S. equity futures fell in early Wednesday trading as European leaders indicated that Greece would not be granted further concessions in its bailout and that leaders do not have a cure for the European debt crisis. U.S. equities also reversed gains mid-session Tuesday after reaching fresh post-crisis highs. S&P 500 futures fell 4.4 points to 1,408.10 and NASDAQ futures fell 8 points to 2,766.00.

In other news around the markets:

  • RBS (NYSE: RBS) is said to be another bank being probed by regulators in making illegal transactions with Iran.
  • A German coalition leader has opposed allowing more time for Greece to implement its reforms.
  • Following the euro's broad rally in Tuesday trading, Seeking Alpha believes that a euro rally is in store. This will be seen, but Tuesday's rally was simply traders believing that the the risk of a disintegration of the Eurozone is easing, not necessarily showing new-found confidence in rescue plans.
  • Germany sold 4.083 billion of 2-year bonds at 0 percent following July's auction at -0.06 percent and on weaker demand.
  • Spanish 10-year bond yields rose to 6.216 percent.
  • Italian 10-year bond yields fell to 5.638 percent.
  • EUR/USD lower near 1.2450 after approaching 1.25 on Tuesday and failing to breach the level.
  • Gold lower at $1,640.60 per ounce.

Overnight, Asian shares were weak following Wall Street's intraday reversal on Tuesday. The Nikkei fell 0.27 percent and the Chinese Shanghai Composite fell 0.5 percent. Also, the Hang Seng Index fell a whopping 1.06 percent and Australian shares slipped 0.17 percent. In Europe, shares also fell with losses spread across the continent. Spanish shares fell 1.58 percent and English shares fell 1.15 percent. Overall, the Dow Jones Stoxx Index fell 0.85 percent.

Commodities were also weak in early trading, showing broad risk-off sentiment Wednesday. WTI Crude futures fell 0.38 percent to $96.47 per barrel and Brent Crude futures fell 0.86 percent to $113.65 per barrel. Copper futures fell 0.53 percent to $344.25 per pound and silver futures fell 0.56 percent to $29.35 per ounce.

The dollar was broadly stronger Wednesday following significant weakness Tuesday. The Dollar Index rose 0.12 percent as the EUR/USD slipped some 20 pips on the session and the USD/JPY remained flat. The AUD/USD also fell, indicating further risk-off sentiment in the markets. The Aussie dollar was also weak against the euro, as the EUR/AUD cross rose back above 1.19 after making new record lows over the last few weeks near 1.16.

In earnings, Dell (NASDAQ: DELL), Best Buy (NASDAQ: BBY), and Lowes (NYSE: LOW) all missed analyst expectations. Notable earnings expected Wednesday include:

  • American Eagle Outfitters (NYSE: AEO) is expected to report Q2 EPS of $0.21 vs. $0.10 a year ago.
  • Hewlett Packard (NASDAQ: HPQ) is expected to report Q2 EPS of $0.98 vs. $1.10 a year ago.
  • Kayak Software (NASDAQ: KYAK) is expected to report Q2 EPS of $0.24.

In economics, existing home sales data is due out at 10:00 am EST. Economists are expecting a reading of 4.52 million vs. 4.37 million previously. Also, the Fed minutes are due out at 2:00 pm EST.

Good luck and good trading.

Posted-In: Earnings News Bonds Guidance Futures Commodities Previews Forex Best of Benzinga


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