Benzinga Market Primer, Tuesday February 19

Futures Rise on ZEW Survey

U.S. equity futures rose in pre-market trading modestly after earlier posting losses as the German ZEW Economic Sentiment Index. The Index was released at 48.2 for February, well above forecasts of a reading of 35 and above the January reading of 31.5. It is important to note that this index is highly correlated with equity returned; a higher ZEW generally points to higher equity prices.

Top News

In other news around the markets:

• A German finance ministry spokesperson has said that the Troika is set to announce that Greece has met all of its 2012 targets and will soon receive the next bailout tranche.


• Japanese finance minister Aso spoke overnight refuting reports that the government will buy foreign bonds as part of its stimulus policy. This has lessened foreign rhetoric against the reflationary policies and has seen the yen strengthen a little.


• Spain's trade deficit was smaller than expected in January at 1.29 billion euros vs. a forecast of a 2.4 billion euro deficit as the ailing nation attempts to export its way out of its debt crisis.


• S&P 500 futures rose 2.1 points to 1,519.20, near session highs as of writing.


• The EUR/USD was lower at 1.3332 after erasing earlier losses.


• Spanish 10-year government bond yields fell to 5.21 percent.


• Italian 10-year government bond yields fell to 4.38 percent.


• Gold rose 0.12 percent to $1,611.40.

Asian Markets

Asian shares were mixed overnight as Japanese shares fell following finance minister Aso's comments. The Japanese Nikkei Index fell 0.31 percent and the Shanghai Composite Index fell 1.6 percent while the Hang Seng Index fell 1.02 percent. Chinese shares could be weaker on reports that more tainted milk powder was found in the country. Also, the Korean Kospi rose 0.2 percent and Australian shares rose 0.36 percent.

European Markets

European shares were higher following the stronger than expected ZEW survey and as peripheral bond yields declined. The Spanish Ibex Index rose 0.5 percent and the Italian FTSE MIB Index rose 0.77 percent despite Banca Montei dei Paschi di Sienna executives appearing in court today to defend a lawsuit from a consumer group looking to block the bank's latest bailout. Meanwhile, the German DAX rose 0.7 percent and the French CAC rose 0.99 percent while U.K. shares rose 0.36 percent.

Commodities

Commodities were mixed overnight as oil was slightly lower, precious metals rallied, and copper dropped. WTI Crude futures fell 0.44 percent to $95.44 per barrel and Brent Crude futures fell 0.01 percent to $117.37 per barrel. Also, Natural Gas futures rose 1.08 percent to $3.19 per million BTU as the weather has gotten colder. Copper futures fell 1.76 percent to $368.75 per pound following dovish RBA minutes. Gold was higher and silver futures rose 0.51 percent to $30.01..

Currencies

Currency markets were in flux as the yen strengthened, the euro weakened, and the cable recouped some gains. The EUR/USD was lower at 1.3332 and the dollar fell against the yen to 93.51 while the cable rose to 1.5498 after approaching the 1.54 barrier Monday. Overall, the Dollar Index was flat on strength against the euro, the Canadian dollar, and the Swiss franc, and weakness against the pound and the yen.

Pre-Market Movers

Stocks moving in the pre-market included:

• Cliff's Natural Resources CLF shares rose 3.29 percent pre-market after the company's successful secondary offering.


• Covidien COV shares fell 1.62 percent ahead of the spinoff of its pharmaceuticals business.


• Apple AAPL shares rose 0.4 percent pre-market as LG Electronics is set to invest in a new panel display system which could help Apple build a smart tv.


• Dell DELL shares rose 0.29 percent despite increased shareholder opposition to the management buyout over the price.

Earnings

Notable companies expected to report earnings Tuesday include:

• Barnes and Noble BKS is expected to report third quarter EPS of $0.60 vs. $0.71 a year ago.


• Dell DELL is expected to report fourth quarter EPS of $0.39 vs. $0.51 a year ago.


• Herbalife HLF is expected to report fourth quarter EPS of $1.03 vs. $0.86 a year ago.


• Spirit Airlines SAVE is expected to report fourth quarter EPS of $0.24 vs. $0.33 a year ago.


• Sina SINA is expected to report fourth quarter EPS of $0.05 vs. $0.21 a year ago.

Economics

On the economics calendar Tuesday, the NAHB housing market index is due out. Also, the Treasury is set to auction 3- and 6-month bills. German inflation and British unemployment data should move markets.

Good luck and good trading.