Benzinga Market Primer, Thursday March 28

Futures Lower On Europe Fears, Cyprus Banks, Eyeing GDP

U.S. equity futures traded lower in early pre-market trade on European fears as Cyprus looks set to reopen its banks for the first time since a week ago Monday. The government will put in place harsh capital controls for a minimum of two weeks, effectively making a euro in Cyprus worth less than a euro anywhere else in the Eurozone.

Top News

In other news around the markets:

• German retail sales in February rose faster than expected, gaining 0.4 percent vs. an expected decline of 1.0 percent. However, sales rose slower than the 3.1 percent rate in January.


• Chinese Industrial Profits in March rose 17.7 percent from a year ago, better than the previous figure of a gain of 5.5 percent.


• Moody's affirmed both Ireland and Portugal's credit ratings and left the nations on credit watch negative as the nations continue to escape the debt crisis.


• S&P 500 futures fell 4.2 points to 1,552.50.


• The EUR/USD was lower at 1.2771.


• Spanish 10-year government bond yields rose 7 basis points to 5.15 percent.


• Italian 10-year government bond yields rose 6 basis points to 4.83 percent.


• Gold fell 0.09 percent to $1,605.30.

Asian Markets

Asian shares were lower overnight led by Chinese stocks as global growth fears reigned. The Japanese Nikkei Index fell 1.26 percent and the Shanghai Composite Index declined 2.82 percent while the Hang Seng Index fell 0.74 percent. Also, the Korean Kospi was flat and Australian shares fell 0.57 percent.

European Markets

European shares were lower overnight as Cyprus prepares to open its banks and allow depositors to begin to withdraw money. The Spanish Ibex Index fell fell 1.11 percent and the Italian FTSE MIB Index fell 0.27 percent as Italy was unable to form a government. Meanwhile, the German DAX fell 0.11 percent and the French CAC declined 0.36 percent while U.K. shares slid 0.05 percent.

Commodities

Commodities were mixed overnight ahead of the key U.S. GDP data as global growth fears weighed on prices. WTI Crude futures were flat at $96.56 per barrel and Brent Crude futures fell 0.13 percent to $109.52 per barrel. Copper futures declined 0.38 percent to $343.15 per pound. Gold was lower and silver futures rose 0.17 percent to $28.68 per ounce.

Currencies

Currency markets were in a clear risk-off mode overnight as the yen gained and the euro slid. The EUR/USD was lower at 1.2771 and the dollar fell against the yen by 0.46 percent to 94.03. Overall, the Dollar Index rose 0.04 percent on strength against the euro, the Canadian dollar, and the Swedish krone. Notably, the Australian dollar was rather weak and most yen crosses declined sharply.

Pre-Market Movers

Stocks moving in the pre-market included:

• Morgan Stanley MS shares fell 1.3 percent pre-market as Credit Suisse CS purchased its European private wealth operations.


• United States Steel X shares fell 0.86 percent as metal futures slid and also as the company bought back $400 million of senior convertible notes.


• Red Hat RHT shares declined 3.74 percent pre-market as the company reported better than expected earnings but lowered guidance.


• PVH Corp. PVH shares declined 4.51 percent pre-market as the company reported weak earnings and lowered guidance.

Earnings

Notable companies expected to report earnings Thursday include:

• BlackBerry BBRY is expected to report a fourth quarter loss of $0.30 per share vs. EPS of $0.22 a year ago.


• The Finish Line FINL is expected to report fourth quarter EPS of $0.75 vs. $0.81 a year ago.


• Gamestop GME is expected to report fourth quarter EPS of $2.09 vs. $1.73 a year ago.

Economics

On the economics calendar Thursday, the final revision to U.S. fourth quarter GDP is due out as well as weekly jobless claims and the PCE Inflation Index. Also, the Chicago PMI and the Kansas City Fed Manufacturing Index are due out. In addition, the Treasury is set to auction 7-year notes. Overnight, Korean and Japanese industrial production are due out, however U.S. markets will be closed.

Good luck and good trading.