Benzinga Market Primer, Thursday February 28

Futures Flat On Draghi Stimulus Comments

U.S. equity futures were relatively flat in early trade following comments from ECB President Mario Draghi. Draghi said that the bank has no intention of tightening policy anytime soon as inflation runs below target and that the bank is far from implementing an exit strategy.

Top News

In other news around the markets:

• Chairman Ben Bernanke finished his two-day testimony in Washington Wednesday, dismissing fears over an exit strategy and reiterated his comment to loose monetary policy.


• Germany's unemployment rate in February was flat at 6.9 percent from an upwardly revised 6.9 percent in January, weaker than forecasts of a 6.8 percent rate.


• Spanish fourth quarter GDP fell 0.8 percent from the previous quarter, worse than expectations of a drop of 0.7 percent.


• S&P 500 futures were flat at 1,515.80.


• The EUR/USD was lower at 1.3108.


• Spanish 10-year government bond yields fell to 5.13 percent.


• Italian 10-year government bond yields fell to 4.75 percent.


• Gold fell 0.38 percent to $1,589.60.

Asian Markets

Asian shares were higher led by Chinese and Japanese stocks on global monetary stimulus, including from Japan. The Japanese Nikkei Index rose 2.71 percent and the Shanghai Composite Index rose 2.26 percent while the Hang Seng Index rose 1.96 percent. Also, the Korean Kospi rose 1.12 percent and Australian shares rose 1.34 percent.

European Markets

European shares were mostly higher save for Italy on post-election fears. The Spanish Ibex Index rose 0.46 percent despite Bankia reporting a massive $27.6 billion loss for 2012 and the Italian FTSE MIB Index fell 0.21 percent. Meanwhile, the German DAX rose 0.54 percent and the French CAC gained 0.35 percent while U.K. shares rose 0.27 percent.

Commodities

Commodities were mixed overnight with precious metals especially weak. WTI Crude futures fell 0.29 percent to $92.49 per barrel and Brent Crude futures rose 0.09 percent to $111.97 per barrel. Copper futures rose 0.08 percent to $357.00 per pound on Chinese strength. Gold was lower and silver futures declined 0.16 percent to $28.94 per ounce.

Currencies

Currency markets were rather quiet as the euro weakened on increased monetary stimulus talk from Draghi. The EUR/USD was lower at 1.3108 and the dollar fell against the yen to 92.14. Overall, the Dollar Index rose 0.04 percent on strength against the euro, the Swiss franc, the Canadian dollar, and the Swedish krone.

Pre-Market Movers

Stocks moving in the pre-market included:

• Groupon GRPN fell 24.78 percent pre-market after the company reported weaker than expected earnings.


• J.C. Penney JCP shares fell 13.75 percent after the company reported earnings that missed estimates on multiple items including restructuring charges and other one-time items.


• Mylan MYL shares rose 2.38 percent after the company boosted its share buyback by $500 million and announced the acquisition of Agila from Strides for $1.6 billion in cash.


• Universal Display PANL rose 2.51 percent after reporting earnings that were in line with estimates on stronger than expected sales and kept guidance relatively strong.

Earnings

Notable companies expected to report earnings Thursday include:

• Cablevision Systems Corp CVC is expected to report fourth quarter EPS of $0.09 vs. $0.22 a year ago.


• Domino's Pizza DPZ is expected to report fourth quarter EPS of $0.60 vs. $0.52 a year ago.


• The Gap Inc. GPS is expected to report fourth quarter EPS of $0.71 vs. $0.44 a year ago.


• Salesforce.com CRM is expected to report fourth quarter EPS of $0.40 vs. $0.43 a year ago.


• Sears Holding SHLD is expected to report fourth quarter EPS of $0.98 vs. $0.54 a year ago.

Economics

On the economics calendar Thursday, the latest U.S. GDP update for the fourth quarter is to be released as well as initial jobless claims. Also, the Chicago PMI and the Kansas City Fed Manufacturing Index are to be released. In addition, the Fed's Sarah Bloom Raskin, Richard Fisher, and Charles Evans are set to speak.

Good luck and good trading.