Benzinga Market Primer: Wednesday, February 20

Futures Flat on Global Stimulus

U.S. equity futures were flat overnight despite comments from global central banks indicating more stimulus may be imminent. Minutes from the Bank of England's Monetary Policy Committee meeting as well as comments from the Reserve Bank of New Zealand Governor Wheelan indicated that global central banks stand ready to ease further should there be a need for further stimulus.

Top News

In other news around the markets:

• Credit Agricole, the large French banking giant, posted a record fourth quarter loss overnight after writing down over 5 billion euros of goodwill relating to an acquisition of Italian assets, dragging French shares lower.


• Talks between EU leaders over the implementation of the new Basel banking rules broke down and talks will restart next week.


• Germany auctioned 10-year bonds to yield 1.66 percent, above the previous auction's 1.56 percent.


• S&P 500 futures were flat at 1,528.00.


• The EUR/USD was higher at 1.3403.


• Spanish 10-year government bond yields fell to 5.16 percent.


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


• Gold fell 0.16 percent to $1,601.80 per ounce.

Asian Markets

Asian shares were mostly higher overnight led by Korean stocks as the Bank of Korea did not lower its growth forecast in the face of the strengthening won. The Japanese Nikkei Index rose 0.84 percent and the Shanghai Composite Index rose 0.6 percent while the Hang Seng Index rose 0.71 percent. Also, the Korean Kospi rose 1.95 percent and Australian shares rose 0.33 percent.

European Markets

European shares were mixed as peripheral shares fell on financial sector fears. The Spanish Ibex Index fell 0.41 percent and Italian FTSE MIB Index declined 0.36 percent. Meanwhile, the German DAX rose 0.19 percent while the French CAC declined 0.28 percent and U.K. shares rose 0.28 percent.

Commodities

Commodities were mixed overnight as metals remained weak. WTI Crude futures rose 0.2 percent to $96.85 per barrel and Brent Crude futures fell 0.12 percent to $117.40 per barrel. Copper futures declined 0.08 percent to $366.35 per pound. Gold was lower and silver futures declined 0.01 percent to $29.42 per ounce.

Currencies

Currency markets saw a weak pound overnight as the cable broke down near 1.53 to 1.5317 on renewed hopes of BoE easing. The EUR/USD was higher at 1.3403 and the dollar fell against the yen to 93.45. Overall, the Dollar Index rose 0.02 percent on strength against the sterling and the Canadian dollar.

Pre-Market Movers

Stocks moving in the pre-market included:

• Best Buy BBY shares rose 3.87 percent pre-market on renewed hopes of a management buyout and also on a newly announced pricing scheme, aimed at competing with rivals such as Amazon AMZN.


• Citigroup C shares fell 0.56 percent pre-market as the company announced it is taking over the branded credit cards for Best Buy from Capital One COF including the purchase of $7 billion in credit card receivables from Capital One.


• United Parcel Service UPS shares rose 2.5 percent pre-market as the company is set to go ex-dividend Thursday.


• Herbalife HLF shares declined 0.98 percent pre-market after the company reported record fourth quarter earnings.

Earnings

Notable companies expected to report earnings Wednesday include:

• Boston Beer SAM is expected to report fourth quarter EPS of $1.25 vs. $1.20 a year ago.


• Dish Network DISH is expected to report fourth quarter EPS of $0.51 vs. $0.70 a year ago.


• Leap Wireless LEAP is expected to report a fourth quarter loss of $1.53 per share vs. a loss of $1.10 per share a year ago.


• Starz STRZA is expected to report fourth quarter EPS of $0.44 vs. $3.93 a year ago.


• Tesla Motors TSLA is expected to report a fourth quarter loss of $0.53 vs. a loss of $0.69 a year ago.

Economics

On the economics calendar Wednesday, MBA Purchase Applications and Housing Starts are due out, as well as producer prices and the Redbook. The Treasury is set to auction 4-week bills and the FOMC minutes are due out this afternoon. Overnight, Eurozone manufacturing PMI's and debt auctions from Spain, France, and England could move markets.

Good luck and good trading.