Market Overview

Benzinga Market Primer: Tuesday, February 5

Benzinga Market Primer: Tuesday, February 5

Futures Rise After Monday Losses

U.S. equity futures rose in pre-market trading after U.S. and global markets suffered losses Monday on the back of renewed sovereign stresses in the eurozone. However, the repricing of the sovereign and geopolitical risk halted Tuesday and shares rose.

Top News

In other news around the markets:

  • Retail sales in the eurozone fell 0.8 percent in December, worse than forecasts of a decline of 0.5 percent, and the November reading was revised lower.
  • The Eurozone Non-Manufacturing PMI was reported as expanding in January to 48.6 from 47.8 in December and was better than the initial estimate of 48.3.
  • OECD Chief Angel Guerria spoke overnight, saying that the recent moves were a reversal of the normalization of yields for Spain and Italy and that politics are responsible for the recent uptick in yields.
  • S&P 500 futures rose 5.4 points to 1,498.80.
  • The EUR/USD was was higher at 1.3539.
  • Spanish 10-year government bond yields fell slightly to 5.44 percent.
  • Italian 10-year government bond yields fell slightly to 4.47 percent.
  • Gold rose 0.11 percent to $1,678.20 per ounce.

Asian Markets

Asian shares were weak on the back of European and American weakness as the increased political risk in Spain and Italy weighed on markets. The Japanese Nikkei Index fell 1.9 percent and the Shanghai Composite Index rose 0.2 percent while the Hang Seng Index declined 2.27 percent. Also, the Korean Kospi fell 0.77 percent and Australian shares fell 0.51 percent as the RBA kept rates on hold at 3.00 percent overnight.

European Markets

European shares were mostly higher in apparent reversals of Monday's flows. The Spanish Ibex Index rose 1.02 percent, led by tech stocks and financials, and the Italian FTSE MIB Index rose 0.57 percent on strength in financials. Meanwhile, the German DAX rose was flat and the French CAC rose 0.55 percent while U.K. shares rose 0.36 percent.


Commodities were mostly higher overnight following weakness Monday. WTI Crude futures rose 0.44 percent to $96.59 per barrel and Brent Crude futures rose 0.45 percent to $116.11 per barrel. Copper futures declined 0.07 percent to $376.60 per pound after the RBA decision. Gold was higher and silver futures rose 0.67 percent to $31.94 per ounce.


Currency markets had a slight risk-on bias over the past few hours as the euro rallied and the yen fell. The EUR/USD was higher at 1.3539 and the dollar rose against the yen to 92.96. Overall, the Dollar Index fell 0.04 percent on weakness against the euro, the pound, and the Swedish Krone, which rallied on stronger Brent prices. Also, the Aussie dollar was weak following inaction from the RBA, with the AUD/USD falling and the AUD/JPY lagging other yen crosses while the EUR/AUD rose.

Pre-Market Movers

Stocks moving in the pre-market included:

  • Dell (NASDAQ: DELL) shares rose 0.6 percent pre-market as Bloomberg reports that a deal could be announced today to take the company private in a LBO, with Silverlake owning $1 billion of the equity and Microsoft (NASDAQ: MSFT) investing $2 billion.
  • Yum! Brands (NYSE: YUM) shares fell 6.44 percent pre-market as the company reported weak fourth quarter earnings and lowered guidance. The company decreased guidance for Chinese sales in January and February by about 25 percent.
  • JC Penney (NYSE: JCP) shares fell 2.69 percent pre-market as a group of bond investors have alleged that the company is already in default.
  • Moody's (NYSE: MCO) shares declined 0.91 percent pre-market after declining over 10 percent Monday as prosecutors are suing rival Standard and Poor's, owned by McGraw Hill (NYSE: MHP), for ratings procedures related to risky mortgage backed securities issued in he build up to the financial crisis. McGraw Hill shares declined 0.38 percent pre-market after falling over 13 percent Monday.


Notable companies expected to report earnings Tuesday include:

  • Archer Daniels Midland (NYSE: ADM) is expected to report fiscal second quarter EPS of $0.56 vs. $0.45 a year ago.
  • Chipotle Mexican Grill (NYSE: CMG) is expected to report fourth quarter EPS of $1.96 vs. $1.81 a year ago.
  • HCA Holdings (NYSE: HCA) is expected to report $0.83 vs. $0.94 a year ago.
  • Panera Bread (NASDAQ: PNRA) is expected to report fourth quarter EPS of $1.74 vs. $1.42 a year ago.
  • Sirius XM Radio (NASDAQ: SIRI) is expected to report fourth quarter EPS of $0.02 vs. $0.01 a year ago.


On the economics calendar Tuesday, same store sales, the Redbook, and the ISM Non-Manufacturing Index are expected. Also, Elizabeth Duke of the Fed Board of Governors is set to speak. In addition, the Treasury is set to auction 4- and 52-week bills. Overnight, German Factory Orders will be watched.

Good luck and good trading.


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