Benzinga Market Primer: Monday, January 28

Futures Flat on Global Weakness

U.S. equity futures were flat in pre-market trade Monday as weakness in European share spilled over into futures markets in the U.S. However, the moves come in spite of a rally in financials in Italy as Banco Monte Dei Paschi di Sienna had its capital plan approved, paving the way for it receive bailout funds.

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In other news around the markets:

• Money flowed bank into peripheral banks in December as deposits climbed in Greece, Spain, Italy, and France, while money flowed out of Germany and Cyprus.


• The Bank of Korean may be the latest nation looking to weaken its currency following similar moves by Japan, as capital inflows are strengthening the Won and hurting exports.


• Chinese industrial companies earned record profits in December, with profits rising 17.3 percent from the same period a year ago.


• S&P 500 futures were flat at 1,495.70.


• The EUR/USD was lower at 1.3447.


• Spanish 10-year government bond yields rose to 5.164 percent.


• Italian 10-year government bond yields rose to 4.156 percent.


• Gold fell 0.07 percent to $1,657.60.

Asian Markets

Asian shares were mixed overnight with Japanese shares lagging and Chinese shares rallying strongly. The Japanese Nikkei Index fell 0.94 percent while the Shanghai Composite Index rose 2.14 percent and the Hang Seng Index rose 0.39 percent. Also, the Korean Kospi declined 0.36 percent and Australian shares rose 0.52 percent.

European Markets

European shares were mostly flat in early trade with Italy seeing notable strength led by financials. The Spanish Ibex Index fell 0.1 percent and the Italian MIB Index rose 0.42 percent. Meanwhile, the German DAX fell 0.09 percent, the French CAC declined 0.09 percent, and U.K. shares fell 0.02 percent.

Commodities

Commodities were mostly lower overnight led by natural gas as weather in the northern U.S. warms. WTI Crude futures fell 0.02 percent to $95.86 per barrel and Brent Crude futures fell 0.29 percent to $112.95 per barrel while Natural Gas futures declined 2.06 percent to $3.37 per million BTU. Copper futures rose 0.05 percent to $365.35 per pound on strength in Australia. Gold was lower and silver futures declined 0.74 percent to $30.98 per ounce..

Currencies

Currency markets were in general risk-off mode as the euro declined and the yen gained. The EUR/USD was lower at 1.3447 and the dollar fell against the yen to 90.60. Overall, the Dollar Index rose 0.08 percent on strength against the pound, the euro, and the Canadian dollar. The pound saw weakness overnight following comments from incoming Bank of England Governor Mark Carney that he is keen on easing policy further in the U.K.

Pre-Market Movers

Stocks moving in the pre-market included:

• Xerox XRX shares rose 1.51 percent pre-market as the company reported strong earnings last Friday.


• Salesforce.com CRM shares rose 1.23 percent pre-market as the company mulls a 4-for-1 stock split.


• Corning GLW shares fell 1.06 percent pre-market ahead of the company's earnings release Tuesday.


• Hewlett-Packard HPQ shares rose 0.65 percent pre-market following positive comments from a Seeking Alpha post.

Earnings

Notable companies expected to report earnings Monday include:

• Biogen Idec BIIB is expected to report fourth quarter EPS of $1.46 vs. $1.51 a year ago.


• BMC Software BMC is expected to report fiscal third quarter EPS of $1.01 vs. $0.93 a year ago.


• Caterpillar CAT is expected to report fourth quarter EPS of $1.70 vs. $2.32 a year ago.


• Seagate Technology STX is expected to report second quarter EPS of $1.28 vs. $1.32 a year ago.


• Yahoo YHOO is expected to report fourth quarter EPS of $0.28 vs. $0.24 a year ago.

Economics

On the economics calendar Monday, durable goods and pending home sales data are due out, followed by the Dallas Fed Manufacturing Index. In addition, the Treasury is set to auction 3- and 6-month bills and 2-year notes. Overnight, Spanish retail sales and an Italian bill auction are expected.

Good luck and good trading.