Benzinga Market Primer, Wednesday January 23

Futures Flat on Earnings, Eye House Vote

U.S. equity futures were near unchanged overnight despite mostly positive earnings from large tech and transportation companies. Also, stocks await a vote in the U.S. House of Representatives on raising the debt ceiling.

Top News

In other news around the markets:

• Spain's GDP contracted 0.6 percent in the fourth quarter to bring the total year rate of GDP contraction to -1.3 percent. Weak domestic demand and slack in export markets weighed on the Spanish economy, said the Bank of Spain.


• British Prime Minister David Cameron promised a U.K. referendum on Europe in a speech overnight with a full vote not expected until 2017.


• Greece actually beat its deficit targets for 2012 with the total deficit coming in at 15.69 billion euros compared to the forecast of 16.31 billion euros, according to the Greek Accounting Office.


• S&P 500 futures fell 1.5 points to 1,487.90.


• The EUR/USD was higher at 1.3328.


• Spanish 10-year government bond yields fell to 5.072 percent.


• Italian 10-year government bond yields fell to 4.18 percent.


• Gold fell 0.06 percent to $1,692.10 per ounce.

Asian Markets

Asian shares were mixed overnight with strong weakness seen in Japanese equities overnight. The Japanese Nikkei Index fell 2.08 percent overnight while the Shanghai Composite Index rose 0.25 percent and the Hang Seng Index fell 0.1 percent. Also, the Korean Kospi fell 0.81 percent and Australian shares rose 0.18 percent.

European Markets

European shares were also mixed overnight with weakness in the periphery offset by strength in the core. The Spanish Ibex Index fell 0.25 percent and the Italian MIB Index also fell 0.25 percent. Meanwhile, the German DAX rose 0.3 percent and the French CAC fell 0.08 percent while U.K. shares rose 0.19 percent.

Commodities

Commodities were mostly higher overnight, once again led by Natural Gas futures as the cold weather in the U.S. drives prices higher. WTI Crude futures rose 0.1 percent to $96.77 per barrel and Brent Crude futures rose 0.12 percent to $112.54 per barrel as Natural Gas futures rallied 0.67 percent to $3.58 per million BTU. Copper futures were near flat overnight despite positive comments from Freeport McMoRan Copper and Gold's FCX CEO stating that he sees low copper inventories and accelerating demand in 2013. Gold was slightly lower and silver futures rose 0.07 percent to $32.20 per ounce.

Currencies

Currency markets continued to see yen strength Wednesday as the euro was near flat overnight and the pound rallied after selling off late Tuesday on comments that the U.K. is mulling more stimulus. The EUR/USD was slightly higher at 1.3328 and the dollar fell against the yen to 88.35. Overall, the Dollar Index fell 0.14 percent on weakness against the yen, the pound, and the Canadian dollar.

Pre-Market Movers

Stocks moving in the pre-market included:

• Google GOOG shares rose 5.05 percent pre-market after the company reported better than expected earnings after the bell despite revenue figures being slightly weak.


• Cree, Inc. CREE shares rose 14.94 percent after the company reported strong earnings and guidance after the bell.


• Intuitive Surgical ISRG shares rose 8.68 percent after the company reported better than expected earnings.


• IBM IBM shares rose 4.04 percent pre-market following the company's strong fourth quarter earnings report and guidance for the future.

Earnings

Notable companies expected to report earnings Wednesday include:

• Abbot Labs ABT is expected to report fourth quarter EPS of $1.50 vs. $1.45 a year ago.
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• McDonald's MCD is expected to report fourth quarter EPS of $1.33 vs. $1.33 a year ago.


• Netflix NFLX is expected to report a fourth quarter loss of $0.60 per shares vs. EPS of $0.73 a year ago.


• Apple AAPL is expected to report fiscal first quarter EPS of $13.41 vs. $13.87 a year ago.


• Quest Diagnostics DGX is expected to report fourth quarter EPS of $1.07 vs. $1.23 a year ago.

Economics

On the economics calendar Wednesday, it is the first full day of the World Economic Forum in Davos, Switzerland, so look for comments from Davos all day. Also, MBA Purchase Application and the FHFA House Price Index are set to be released. In addition, the Treasury is set to auction 4-week bills and overnight, the Chinese HSBC Manufacturing Index, Eurozone Manufacturing PMI's, and Italian retail sales are expected.

Good luck and good trading.