Benzinga Market Primer, Monday October 1

U.S. equity futures rose in early Monday trading as Europe's manufacturing sector shrank less than previously thought in September and Spain's bank stress tests showed that its financial sector needs less capital than previously thought. The benchmark Eurozone Manufacturing Purchasing Managers Index rose to 46.1 in September, higher than the "flash," initial estimate of 46.0 and higher than August's reading of 45.1. However, the New Orders sub-Index. a leading indicator for future growth, fell 43.5 in September from 43.7 in August.

Top News

In other news around the markets:

• Xstrata's board of directors recommended shareholders vote in favor of Glencore International's renewed merger proposal, opening the way for the companies to create a mining conglomerate with a market cap near $70 billion.


• China's official manufacturing PMI rose in September to 49.8 from 49.2 in August, however the index came in below economist estimates of a return to growth at 50.1.


• Spanish Prime Minister Mariano Rajoy is set to meet with European Commissioner for Economic and Monetary Affairs and the Euro Oli Rehn, raising speculation that Spain will in fact ask for a full sovereign bailout. The meeting comes following comments from Germany over the weekend that Spain does not yet need another bailout, as it already just asked for some $76 billion for its bank bailout, less than the previously estimated $128 billion.


• S&P 500 futures rose 6.6 points to 1,440.8.


• The EUR/USD was higher at 1.2894.


• Spanish 10-year government bond yields fell to 5.89 percent.


• Italian 10-year government bond yields fell to 5.066 percent.


• Gold fell 0.02 percent to $1,773.60 per ounce.

Overseas Markets

Asian shares were mixed in overnight trading as Chinese and Korean stocks rose while Japanese shares fell. The benchmark Nikkei Index fell 0.83 percent while China's Shanghai Composite Index rose 1.45 percent. The Chinese strength dragged the Korean Kospi higher by 0.38 percent and Australian shares by 0.04 percent. Also, European shares rose in early trading, led by peripheral shares. Spain's Ibex Index rose 1.21 percent and Italy's MIB Index rose 1.98 percent following the release of the Spanish bank stress test. The German DAX was also strong, rising 1.31 percent, and the French CAC rose 1.6 percent. U.K> shares were also higher, with the FTSE 100 Index rising 1.09 percent.

Commodities

Commodities were mostly lower in early Monday trading, as global PMI's showed continued contraction of the global economy in September. WTI Crude futures fell 0.13 percent to $92.07 per barrel and Brent Crude futures fell 0.19 percent to $112.18 per barrel. Copper futures fell on the weak China data, falling 0.15 percent to $375.25 per pound. Gold was slightly lower and silver futures fell 0.16 percent to $34.52 per ounce.

Currencies

Currencies were mixed in early trading, as the dollar weakened broadly. The EUR/USD was higher at 1.2894 and the dollar fell against the yen. Overall, the Dollar Index fell 0.28 percent in early trading, even as the greenback gained against the pound. The dollar was also weak against the Canadian dollar, the Aussie dollar and the Swiss franc.

Pre-Market Movers

Stocks moving in the pre-market included J.P. Morgan Chase JPM, which rose 0.84 percent in pre-market trading as the bank raised mortgage rates. Time Warner TWX also rose 0.45 percent in the pre-market as flocked to stocks with high dividend yields. Meanwhile, Pfizer PFE shares fell 0.2 percent pre-market despite a new cancer drug showing promise, doubling the benefit in lung cancer patients of existing medication.

Earnings

Notable companies reporting earnings Tuesday include:

• Cal-Maine Foods CALM is expected to report quarterly EPS of $0.33 vs. $0.13 a year ago.<l/i>
  
• Robbins and Meyers RBN is expected to report quarterly EPS of $0.96 vs. $0.76 a year ago.


• Team Inc. TISI is expected to report quarterly EPS of $0.39 vs. $0.33 a year ago.

Economics

On the economic calendar, investors will get more data on the state of the U.S. economy as the Markit U.S. Purchasing Managers Index and the ISM Manufacturing Index are both due out. Fed Chariman Ben Bernanke is also set to speak during the trading session, speaking at the Economic Club of Indiana, and the Treasury is set to auction 3- and 6-month bills. There will also be a French bill auction and if yields rise at auction, it could raise fears of a further worsening of the European debt crisis.

Good luck and good trading.