Market Overview

Benzinga Market Primer: Tuesday, February 26

Benzinga Market Primer: Tuesday, February 26
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Futures Rise After Losses, Italian Elections

U.S. equity futures gained in the pre-market after massive losses Monday following the turmoil over the Italian elections. It appears as though no majority will be formed and that Italians will need to go back to the polls to try to elect a majority government.

Top News

In other news around the markets:

  • Federal Reserve Bank of Atlanta President Dennis Lockhart sees asset purchases continuing at least into mid-2013 in a speech given overnight.
  • To recap the Italian elections, market favorite Bersani has won a majority in the lower house of Parliament but opposition parties led by Berlusconi and Grillo have won enough seats to block a majority in the senate.
  • Japan is set to vote on the new Bank of Japan appointments on March 14 and 15 and should have a new Governor at that time.
  • S&P 500 futures rose 3.8 points to 1,490.80.
  • The EUR/USD was higher at 1.3096.
  • Spanish 10-year government bond yields rose to 5.32 percent.
  • Italian 10-year government bond yields rose 33 basis points to 4.81 percent.
  • Gold rose 0.67 percent to $1,597.10.

Asian Markets

Asian shares were lower overnight in reaction to the poor Italian election results. The Japanese Nikkei fell 2.26 percent as the yen strengthened and the Shanghai Composite Index fell 1.4 percent while the Hang Seng Index fell 1.32 percent. Also, the Korean Kospi declined 0.47 percent and Australian shares fell 1.03 percent.

European Markets

European shares were also lower overnight led lower by Italian banks following the election results. The Spanish Ibex Index fell 2.84 percent and the Italian FTSE MIB Index declined 4.52 percent led by the big Italian banks. Meanwhile, the German DAX fell 1.8 percent and the French CAC fell 2.07 percent while U.K. shares declined 1.28 percent.


Commodities were weak overnight as the market had a broad risk-off tone after the election results. WTI Crude futures fell 0.84 percent to $92.23 per barrel and Brent Crude futures fell 0.99 percent to $113.32 per barrel. Copper futures fell 0.32 percent overnight as Australian stocks fell and RBA members warned on further rate cuts. Gold was higher and silver futures fell 0.25 percent to $28.98 per ounce.


Currency markets were more stable overnight after the massive volatility of Monday which saw major pairs trade in massive ranges. The EUR/USD was higher at 1.3096 and the dollar rose against the yen to 92.02. Overall, the Dollar Index rose 0.05 percent on strength against the yen, the Swiss franc, and the Canadian dollar. It is important to note that the EUR/JPY traded in an astounding 6 big figure range Monday, seemingly flushing out the levered longs.

Pre-Market Movers

Stocks moving in the pre-market included:

  • Autodesk (NASDAQ: ADSK) shares fell 2.24 percent pre-market after the company reported earnings and lowered guidance.
  • McDonald's (NYSE: MCD) shares rose 1.29 percent as the company ramps up operations in Russia.
  • Dow Chemical (NYSE: DOW) shares rose 3.17 percent pre-market as the company spoke of benefits from America becoming energy independent.
  • General Motors (NYSE: GM) shares rose 2.54 percent pre-market as the government looks to sell the last of its stake in the automaker.


Notable companies expected to report earnings Tuesday include:

  • AutoZone (NYSE: AZO) is expected to report second quarter EPS of $4.75 vs. $4.15 a year ago.
  • Bank of Montreal (NYSE: BMO) is expected to report fourth quarter EPS of $1.47 vs. $1.42 a year ago.
  • First Solar (NASDAQ: FSLR) is expected to report fourth quarter EPS of $1.76 vs. $1.26 a year ago.
  • Home Depot (NYSE: HD) is expected to report fourth quarter EPS of $0.64 vs. $0.50 a year ago.
  • Macy's (NYSE: M) is expected to report fourth quarter EPS of $1.99 vs. $1.70 a year ago.
  • (NASDAQ: PCLN) is expected to report fourth quarter EPS of $6.54 vs. $5.37 a year ago.
  • RadioShack (NYSE: RSH) is expected to report a fourth quarter loss of $0.05 vs. EPS of $0.12 a year ago.
  • TiVo (NASDAQ: TIVO) is expected to report a fourth quarter loss of $0.11 vs. EPS of $0.06 a year ago.


On the economics calendar Tuesday, Chairman Bernanke begins his two-day testimony in Washington. Also, Chain Store Sales and the Redbook are due out followed by the FHFA House Price Index, the Case-Shiller Home Price Index, and New Home Sales. In addition, consumer confidence data and the Richmond Fed Manufacturing Index are expected. Lastly, the Treasury is set to auction 4-week bills and 5-year notes. Overnight, British GDP data and Italian auctions should move markets.

Good luck and good trading.

Posted-In: Earnings News Bonds Guidance Dividends Futures Commodities Previews Best of Benzinga


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