Benzinga Market Primer, Monday, December 10

U.S. equity futures slipped in pre-market trading as mixed economic data with a slight positive bias was weighed down by fears over Europe's debt crisis. Positive industrial production and retail sales data in China were offset by weak trade data. Meanwhile, the return of former Prime Minister Silvio Berlusconi to Italian politics has created a new political crisis in the country and caretaker Prime Minister Monti said he would not seek a new term amidst the crisis.

Top News

In other news around the markets:

• Recent developments on the Fiscal Cliff may be indicating that leaders are closer than previously thought to a deal, as top Senate Republicans are seemingly giving up on their no tax-hikes pledge to reach a deal, but the House still remains divided.


• Due to its recent success, Greece has extended the debt buyback offer that it launched last week in hopes of buying back more debt to aid its finances.


• The Bank for International Settlements (BIS) has warned economies around the world to be careful of sparking a new credit bubble with extended low rates. The warning comes as Central Banks are internally debating the exact effects of non-traditional policy on inflation.


• S&P 500 futures fell 4.5 points to 1,411.50.


• The EUR/USD was slightly higher at 1.2903.


• Spanish 10-year government bond yields rose to 5.648 percent.


• Italian 10-year government bond yields rose to 4.684 percent.


• Gold rose 0.28 percent to $1,710.28 per ounce.

Asian Markets

Asian shares initially traded strongly but gave back some gains upon the release of the weak Chinese trade data. The Japanese Nikkei Index rose 0.07 percent and the Shanghai Composite Index rose 1.07 percent while the Hang Seng Index gained 0.39 percent. In addition, the Korean Kospi was flat and Australian shares rose 0.14 percent.

European Markets

European shares fell sharply in early trade with notable weakness seen in Italian stocks as fears over Italy's new political crisis have caused investors to fear that economic reforms will be ignored for the sake of politics. The Spanish Ibex Index fell 1.98 percent and the Italian MIB Index fell a whopping 3.47 percent on these fears. Meanwhile, the German DAX fell 0.62 percent on poor domestic trade data, the French CAC slipped 0.67 percent, and U.K. shares fell 0.31 percent.

Commodities

Commodities were slightly stronger overnight, shrugging off much of the bad news emanating both from China and Europe and rising on hopes of a Fiscal Cliff deal. WTI Crude futures rose 0.47 percent to $86.33 per barrel and Brent Crude futures rose 0.74 percent to $107.81. Copper futures rose 1.11 percent to $370.75 per pound because, although the headline Chinese trade data was weak, metals imports remained strong, especially iron ore demand. Gold was higher and silver futures rose 0.69 percent to $33.36 per ounce.

Currencies

Currency markets were in clear risk-off mode overnight as the yen reigned and the euro was little changed. The EUR/USD was basically flat at 1.2903 and the dollar fell against the yen to 82.16. Overall, the Dollar Index rose 0.05 percent to $80.451 on strength against the Swiss franc and the Swedish krone. Except for yen crosses, forex markets were pretty quiet overnight with moves limited. The AUD/JPY fell 0.28 percent to 86.09 and the EUR/JPY fell to 106.06.

Pre-Market Movers

Stocks moving in the pre-market included:

• Freeport-McMoRan Copper and Gold FCX shares rose 0.91 percent pre-market following its massive acquisitions last week where the company shelled out nearly $20 billion to purchase McMoRan Exploration MMR and Plains Exploration PXP.


• United States Steel X shares fell 0.55 percent pre-market as weak Chinese trade data overshadowed the subtly positive iron ore import data.


• Advanced Micro Devices AMD shares rose 0.42 percent pre-market as the company has started to attract new bullish speculation, according to Schaeffer's Research.


• Bank of America BAC shares fell 0.7 percent pre-market as financials as a sector traded lower.

Earnings

Notable companies expected to report earnings Monday include:

• Stein Mart SMRT is expected to report a third quarter loss of $0.09 vs. a loss of $0.08 a year ago.


• Winnebago Industries WGO is expected to report first quarter EPS of $0.10 vs. $0.04 a year ago.

Economics

On the economics calendar Monday, the Treasury is set to auction 3- and 6-month bills. Overnight, French Non-Farm Payrolls are due out and the German Zew Economic Survey is expected to be released.

Good luck and good trading.