Benzinga Market Primer, Monday October 15

U.S. equity futures rose in early Monday trading as China reported a trade surplus that rose faster than economist expectations, raising hopes that the Chinese economy is close to bottoming following a protracted slowdown in growth. The National Bureau of Statistics of China reported that the trade surplus for September rose to $27.7 billion from $26.6 billion in August on expectations of $20.4 billion. The trade surplus was boosted by a 9.9 percent increase in exports from a year ago.

Top News

In other news around the markets:

• Japanese telecommunications conglomerate Softbank is set to make a capital injection into U.S. wireless carrier Sprint S of approximately $20 billion, taking a roughly 70 percent stake in the company.


• Chinese inflation data was released, showing that producer prices continued to drop in September, falling 0.1 percent, while consumer prices rose 0.3 percent.


• Google GOOG awaits a decision Monday from a French regulator over whether its new privacy policy violates EU data protection rules. A bad outcome could be costly for the company.


• S&P 500 futures rose 5.8 points to 1,427.30.


• The EUR/USD was marginally higher at 1.2956 in volatile overnight trading.


• Spanish 10-year government bond yields rose to 5.676 percent.


• Italian 10-year government bond yields fell to 4.957 percent.


• Gold fell 0.68 percent to $1,747.70 per ounce.

Asian Markets

Asian shares were mixed in overnight trade, led by Japanese shares. The Nikkei Index rose 0.51 percent in Tokyo trading while the Hang Seng Index rose 0.06 percent. However, The Shanghai Composite Index fell 0.3 percent and Australian shares fell 0.07 percent as investors fretted that better economic data in China decreases the chances of renewed Chinese stimulus in the new year.

European Markets

European shares were mostly higher after opening lower following slight weakness in some Asian markets. The Spanish Ibex Index rose 0.66 percent while the Italian MIB Index rose 0.78 percent and Greek shares rose in tandem. The French CAC 40 rose 1.02 percent, the best performing index in the region Monday, as the German DAX rose 0.69 percent in Frankfurt. Also, U.K. shares, measured by the FTSE 100 Index, rose 0.37 percent.

Commodities

Commodities were weaker in early Monday trade on continued global growth fears. WTI Crude futures fell 0.4 percent to $91.49 per barrel and Brent Crude futures fell 0.24 percent to $114.35 per barrel. Copper futures fell 0.42 percent to $368.75 on the broad weakness in commodities. Gold was lower and silver futures fell 1.24 percent to $33.25 per ounce.

Currencies

Currency markets were rather volatile overnight, with the euro bouncing late in the overnight session. The EUR/USD was marginally higher and the dollar rose against the yen on the announcement of the Sprint-Softbank deal. Overall, the Dollar Index fell 0.04 percent, pushed lower by weakness against the euro, the Swiss Franc, and the Canadian dollar. The Australian dollar was weak against a basket of currencies except for the yen and the Swiss franc was notably strong against major pairs.

Pre-Market Movers

Stocks moving in the pre-market included:

• Sprint S shares rose 9.95 percent pre-market on the news that Japanese carrier Softbank is set to take a 70 percent stake in the company.


• Citigroup C shares rose 0.43 percent ahead of its earnings release Monday morning.


• Apple AAPL shares rose 0.59 percent as investors bought Apple and sold Research in Motion RIMM fearing that the to be released Blackberry 10 operating system will not meet expectations.


• LSI Corporation LSI shares fell 3.88 percent pre-market.



• Earnings

  Notable companies reporting earnings Monday include:

  
  
  • Citigroup Incorporated C is expected to report third quarter EPS of $0.97 vs. $1.23 a year ago.
  
  
  • Guaranty Bancorp GBNK is expected to report third quarter EPS of $0.03 vs. a loss of $0.28 a year ago.
  
  
  • OCZ Technology OCZ is expected to report a third quarter loss of $0.15 per share vs. a loss of $0.03 a year ago.
  
  
  • Wynn Resorts WYNN is expected to report third quarter EPS of $1.33 vs. $1.05 a year ago.

  Economics

  On the economic calendar Monday, investors will get new data on the state of the U.S. consumer as retail sales data is set to be released. Also, the Federal Reserve Bank of New York is set to release the Empire State Manufacturing Survey and the Census Bureau is set to release data on business inventories. In addition, speeches from Fed members William Dudley, President of the New York Fed, Jeffery Lacker, President of the Richmond Fed, and James Bullard, President of the Kansas City Fed, will give more clarity on the state of the U.S. economy and the progress of QE3. Investors should also watch for comments from Bank of Canada Governor Carney, who is set to speak towards the end of the trading session.

  Good luck and good trading.