Benzinga Market Primer: Thursday, January 31
Futures Flat After GDP
U.S. equity futures were flat in pre-market trade Thursday following the weak GDP report issued in the U.S. Wednesday. The Bureau of Economic Analysis reported that the economy contracted 0.1 percent in the fourth quarter. However, the underlying growth rate, excluding volatile terms such as defense spending and inventories, was much stronger.
In other news around the markets:
- Banco Santander (NYSE: SAN) reported a large loss overnight and wrote off a further $25.5 billion worth of assets tied to real estate, showing that the Spanish financial crisis is nowhere near over.
- Germany's unemployment rate unexpectedly fell in January to 6.8 percent from 6.9 percent.
- Research in Motion (NASDAQ: RIMM) unveiled its latest operating system, Blackberry 10, Wednesday and announced that it is officially changing its name from Research in Motion to Blackberry.
- S&P 500 futures were flat at 1,495.30.
- The EUR/USD was lower at 1.3562.
- Spanish 10-year government bond yields rose to 5.25 percent.
- Italian 10-year government bond yields rose to 4.32 percent.
- Gold fell 0.38 percent to $1,675.20 per ounce.
Asian shares were mixed overnight with Japanese shares gaining on hopes that policy moves to weaken the yen are working to stimulate the economy. The Japanese Nikkei Index rose 0.22 percent and the Shanghai Composite Index rose rose 0.12 percent while the Hang Seng Index fell 0.39 percent. Also, the Korean Kospi declined 0.13 percent and Australian shares were weak, falling 0.37 percent on decreased hopes of further monetary stimulus.
European shares were lower in early trade, led by Spain, following a slew of weak bank earnings across the continent. The Spanish Ibex Index declined 1.58 percent, led lower by financials, and the Italian MIB Index fell 0.91 percent, led lower by financials and industrial companies. Meanwhile, the German DAX declined 0.31 percent and the French CAC lost 0.6 percent and U.K. shares rose 0.4 percent.
Commodities were mostly lower overnight in a clear risk-off market. WTI Crude futures fell 0.2 percent to $97.73 per barrel and Brent Crude futures lost 0.03 percent to $114.83 per barrel. Copper futures rose 0.4 percent to $376.45. Gold was lower and silver futures declined 0.63 percent to $31.97 per ounce.
Currency markets were rather quiet overnight with moves in major crosses tepid at best. The EUR/USD was lower at 1.3562 and the dollar fell against the yen to 91.02. Overall, the Dollar Index was flat on strength against the euro, the Canadian dollar, and the Swiss franc, while weakness was seen against the yen and the pound. The Aussie dollar was also rather unchanged and the EUR/GBP declined to 0.8573 after failing to break 0.86.
Stocks moving in the pre-market included:
- Facebook (NASDAQ: FB) shares declined 4.71 percent pre-market after the company reported weaker than expected earnings.
- Hess (NYSE: HES) shares declined 1.06 percent to $67.16 per share after rallying earlier this week on both stronger than expected earnings and an activist investor stake.
- Research in Motion continued its post-Blackberry 10 decline, falling 4.43 percent pre-market after declining 12 percent Wednesday.
- Phillips 66 (NYSE: PSX), the refiner recently spun out of ConocoPhillips (NYSE: COP), share rose 0.07 percent pre-market after the company reported strong earnings and announced its intention to convert to an MLP.
Notable companies expected to report earnings Thursday include:
- Colgate Palmolive (NYSE: CL) is expected to report fourth quarter EPS of $1.40 vs. $1.30 a year ago.
- Dow Chemical (NYSE: DOW) is expected to report fourth quarter EPS of $0.34 vs. $0.25 a year ago.
- Mastercard (NYSE: MA) is expected to report fourth quarter EPS of $4.82 vs. $4.03 a year ago.
- NASDAQ OMX Group (NASDAQ: NDAQ) is expected to report fourth quarter EPS of $0.61 vs. $0.63 a year ago.
- Occidental Petroleum (NYSE: OXY) is expected to report fourth quarter EPS of $1.67 vs. $2.02 a year ago.
- Under Armor (NYSE: UA) is expected to report fourth quarter EPS of $0.46 vs. $0.31 a year ago.
- Viacom (NASDAQ: VIAB) is expected to report fiscal first quarter EPS of $0.91 vs. $1.06 a year ago.
On the economics calendar Thursday, jobless claims, personal income, and outlays are due out at 8:30 am. Also, the Chicago PMI is set to be released later this morning. Overnight, Manufacturing PMI's from China and Europe will be released and should set the tone of the market. Also, the monthly Non-Farm Payrolls report is due out Friday.
Good luck and good trading.
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