Benzinga Market Primer: Tuesday, February 12
Futures Lower Following North Korean Nuclear Test
U.S. equity futures declined in overnight trade as many Asian markets remained closed as North Korean tested its third atomic bomb in defiance of the U.N. South Korean authorities registered a 4.9 magnitude earthquake in its northern counterpart, most likely due to the nuclear test.
In other news around the markets:
- Barclays (NYSE: BCS) announced a new round of job cuts totaling 3,700 cuts after the company reported a full year loss, with 1,800 cuts coming from the investment bank and 1,900 from its struggling European consumer and business banking unit.
- Giuseppe Orsi, the CEO of Italian defense giant Finmeccanica, has been arrested overnight in Italy on charges that he bribed Indian authorities to win defense contracts.
- The G7 leaders released a statement this morning, not necessarily condemning moves by Japan to weaken currencies, but supported Japan in its efforts to stimulate its economy. The full statement can be found here.
- S&P 500 futures fell 1.8 points to 1,511.30.
- The EUR/USD was fell to 1.3401.
- Spanish 10-year government bond yields fell to 5.35 percent.
- Italian 10-year government bond yields fell to 4.56 percent.
- Gold fell 0.5 percent to $1,641.00 per ounce.
Many Asian markets were once again closed overnight in recognition of the Lunar New Year holiday. The Korean Kospi fell 0.26 percent following the reported nuclear test in North Korea and Australian shares were flat overnight.
European shares were mixed overnight as Italian stocks fell and Spanish stocks rallied. The Spanish Ibex Index rose 0.38 percent and the Italian FTSE MIB Index declined 0.28 percent, led lower by industrial stocks. Meanwhile, the German DAX fell 0.2 percent, dragged lower by weaker than expected earnings from ThyssenKrupp, the French CAC rose 0.05 percent, and U.K> shares rose 0.13 percent.
Commodities were slightly weaker overnight with metal futures falling led by silver. WTI Crude futures fell 0.26 percent to $96.78 per barrel and Brent Crude futures were flat at $118.13 per barrel. Copper futures declined 0.24 percent to $371.30 per ounce. Gold was lower and silver futures fell 0.79 percent to $30.67 per ounce.
Currency markets had no real direction in overnight trade in a volatile, whip-saw session, as the euro traded near flat and the pound continued its skid. The EUR/USD was lower at 1.3401 and the dollar was flat against the yen at 94.36 while the pound declined against the dollar by 0.47 percent to 1.5585. Overall, the Dollar Index rose 0.15 percent on strength against the pound and the Canadian dollar.
Stocks moving in the pre-market included:
- Berkshire Hathaway (NYSE: BRK-B) shares fell 0.13 percent pre-market following confusion over an SEC filing Monday in which State Street (NYSE: STT) has taken a 6.9 percent passive stake in Berkshire, although initial headlines had the story backwards.
- Tesla (NASDAQ: TSLA) shares rose 0.49 percent after confusion over when it is scheduled to report earnings. Many analysts had expected earnings to be released Monday but the company denied scheduling such an earnings release.
- Facebook (NASDAQ: FB) shares declined 3.04 percent pre-market as a patent holding firm sued the company for infringing patents on the Like button.
- HCA (NYSE: HCA) shares fell 1.66 percent pre-market after the company announced a new 50 million share secondary offering, or about 12.8 percent of the total number of shares.
Notable companies expected to report earnings Tuesday include:
- Bankrate (NYSE: RATE) is expected to report fourth quarter EPS of $0.11 vs. $0.19 a year ago.
- Buffalo Wild Wings (NASDAQ: BWLD) is expected to report fourth quarter EPS of $0.95 vs. $0.73 a year ago.
- Clearwire (NASDAQ: CLWR) is expected to report a fourth quarter loss of $0.22 per share vs. a loss of $0.81 per share a year ago.
- Cliffs Natural Resources (NYSE: CLF) is expected to report fourth quarter EPS of $0.58 vs. $1.42 a year ago.
- Coca-Cola (NYSE: KO) is expected to report fourth quarter EPS of $0.44 vs. $0.39 a year ago.
- Hercules Offshore (NASDAQ: HERO) is expected to report a fourth quarter loss of $0.07 per share vs. a loss of $0.16 a year ago.
- McGraw-Hill (NYSE: MHP) is expected to report fourth quarter EPS of $0.72 vs. $0.63 a year ago and could comment on the recent legal action taken against Standard and Poor's.
On the economics calendar Tuesday, the NFIB Small Business Optimism Index is to be released followed by same store sales and the Redbook.
In addition, Esther George, Dennis Lockhart, and Charles Plosser of the Fed are all set to speak and ECB President Mario Draghi is also to give a speech ahead of President Obama's State of the Union address.
The Treasury is also set to auction 4-week bills and 3-year notes. Overnight, eurozone industrial production figures are to be released as well as the Bank of England's inflation report, followed by outgoing Governor Mervyn King's press conference.
Good luck and good trading.
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