Benzinga Market Primer, Friday March 22

Futures Flat As Cyprus Debates Bailout, ECB Deadline Looms

U.S. equity futures were flat in early pre-market trade as Cypriot lawmakers continued to debate the revised bailout procedure. After rejecting the initial bailout proposal and failing to secure a bridge loan from Russia, Cyprus now must come up with a plan to save itself before the ECB pulls its emergency funding on Monday.

Top News

In other news around the markets:

• The German IFO Business Climate Index, a broad measure of economic confidence in Germany, fell to 106.7 from 107.4 in February, missing expectations of a reading of 107.6. It is important to note that both the current conditions and the expectations indexes were weak and that 85 percent of respondents had already responded before Cyprus' problems flared up.


• The OECD released growth forecasts for China and now expects China to grow 8.5 percent in 2013 and 8.9 percent in 2014.


• Italy's Bersani is attempting to form a grand coalition in Parliament to pass election reform and hopefully win in a second round of elections. The coalition would be with Berlusconi and his allies and would block out the radicals MS5 party led by Beppe Grillo.


• S&P 500 futures rose 0.4 points to 1,539.30.


• The EUR/USD was slightly higher at 1.2938 in volatile trading.


• Spanish 10-year government bond yields fell to 4.86 percent from 4.88 percent.


• Italian 10-year government bond yields fell to 4.57 percent from 4.58 percent.


• Gold declined 0.15 percent to $1,611.30 per ounce.

Asian Markets

Asian shares were mixed overnight as strong weakness was seen in Japan on comments from Finance Minister Aso that easing benefits would take time to filter through the economy. The Japanese Nikkei Index fell 2.35 percent and the Shanghai Composite Index rose 0.17 percent while the Hang Seng Index declined 0.5 percent. Also, the Korean Kospi fell 0.11 percent and Australian shares rose 0.16 percent.

European Markets

European shares were mostly lower overnight on Cyprus fears but also on the weak German IFO Survey. The Spanish Ibex Index declined 0.61 percent and the Italian FTSE MIB Index gained 0.21 percent. Meanwhile, the German DAX fell 0.22 percent and the French CAC declined 0.46 percent while U.K. shares rose 0.02 percent.

Commodities

Commodities were mixed overnight as gold slipped and copper continued to rebound from its lows. WTI Crude futures rose 0.19 percent to $92.63 per barrel and Brent Crude futures declined 0.12 percent to $107.34 per barrel. Copper futures rose 0.35 percent to $344.70 per pound on hopes of a Chinese rebound. Gold was lower and silver futures declined 0.57 percent to $29.05 per ounce.

Currencies

Currency markets were in flux overnight as the euro popped and the yen strengthened also. The EUR/USD was higher at 1.2938 and the dollar fell against the yen to 94.38. Overall, the Dollar Index fell 0.09 percent on weakness against the euro, the yen, the pound, and the Swiss franc. Notably, the pound failed to break and hold above 1.52 against the dollar after declining below 1.49 in its skid.

Pre-Market Movers

Stocks moving in the pre-market included:

• Nike NKE shares rose 8.47 percent pre-market after the company reported better than expected earnings.


• Micron Technology MU rose 3.42 percent after reporting better than expected earnings.


• Salesforce.com CRM shares rose 0.85 percent pre-market after the company announced a 4-for-1 stock split.


• Citigroup C shares fell 1.08 percent pre-market on Cyprus fears.

Earnings

Notable companies expected to report earnings Friday include:

• Darden Restaurants DRI is expected to report third quarter EPS of $1.01 vs. $1.25 a year ago.


• Tiffany TIF is expected to report fourth quarter EPS of $1.36 vs. $1.39 a year ago.

Economics

On the economics calendar Friday, the ECRI Weekly Index is due out and the Fed's Sarah Bloom Raskin is set to speak on the labor market in Washington.

Good luck and good trading.