Benzinga Market Primer: Friday, April 12

Futures Lower Ahead of Bank Earnings

U.S. equity futures slipped in early pre-market trading Friday ahead of key earnings from U.S. banking giants J.P. Morgan Chase JPM and Well Fargo WFC. Famed analyst Dick Bove believes that 2013 bank earnings will be record-setting earnings once again.

Top News

In other news around the markets:

• Eurozone industrial production data for February was released to mixed results. The month-over-month reading beat expectations, rising 0.4 percent vs. 0.1 percent expected while the previous reading was revised lower to -0.6 percent from -0.4 percent. However, on an annualized basis, industrial production slipped 3.1 percent from a year ago, below expectations of a 2.5 percent annualized contraction.


• Reports circulated that Cyprus had asked for more bailout funds at the Eurogroup meeting, however this morning, a government spokesperson denied these allegations and said that Cyprus has not asked for more funding.


• An IMF draft report leaked to markets shows the IMF slightly cutting its 2013 U.S. growth outlook to 1.7 percent from 2.0 percent previously citing the fiscal cuts for a weaker outlook.


• S&P 500 futures fell 4.00 points to 1,583.50.


• The EUR/USD was lower at 1.3050.


• Spanish 10-year government bond yields fell to 4.66 percent from 4.77 percent.


• Italian 10-year government bond yields rose to 4.34 percent from 4.33 percent.


• Gold fell 0.88 percent to $1,547.80 per ounce.

Asian Markets

Asian shares were mostly lower overnight as the post-Bank of Japan momentum finally cooled in Japan. The Japanese Nikkei Index fell 0.47 percent and the Shanghai Composite Index declined 0.58 percent while the Hang Seng Index slipped 0.06 percent. Also, the Korean Kospi fell 1.31 percent on fears that North Korea has the capability to launch a nuclear missile and Australian shares rose 0.13 percent.

European Markets

European shares were lower overnight on Cyprus fears as well as following the weaker than expected industrial production report. The Spanish Ibex Index fell 1.41 percent and the Italian FTSE MIB Index fell 1.6 percent. Meanwhile, the German DAX declined 1.5 percent and the French CAC lost 1.08 percent while U.K. shares fell 0.67 percent.

Commodities

Commodities were lower overnight on global growth fears in a clear risk-off environment. WTI Crude futures fell 1.24 percent and Brent Crude futures declined 1.34 percent. Copper futures slipped 0.45 percent following the draft IMF report on the U.S. showing slower growth. Gold was lower and silver futures fell 1.22 percent to $27.36 per ounce.

Currencies

Currency markets were on the move overnight as the euro weakened and the yen strengthened in a clear risk-off mood. The EUR/USD was lower at 1.3050 and the dollar fell against the yen by 0.6 percent to 99.08. Overall, the Dollar Index rose 0.22 percent on strength against the euro, the pound, the Canadian dollar, and the Swiss franc.

Earnings Reported Yesterday

Key companies that reported earnings Thursday include:

• Pier 1 Imports PIR reported fourth quarter EPS of $0.60, in line with estimates, on slightly stronger than expected revenue of $551.6 million.


• Rite Aid RAD reported fourth quarter EPS of $0.13 vs. an expected loss of $0.02 per share on revenue of $6.46 billion vs. $6.45 billion expected.

Pre-Market Movers

Stocks moving in the pre-market included:

• Cliffs Natural Resources CLF shares rose 1.81 percent pre-market as institutions continue to buy the stock.


• J.C. Penney JCP shares declined 4.37 percent pre-market after rallying from Tuesday's lows the previous two days on fears that new CEO Mike Ullman an activist investor Bill Ackman cannot save the company. New reports surfaced that J.C. Penney has a capital shortfall of close to $1 billion that it needs to fill to stay afloat.


• Merck MRK shares fell 1.14 percent after reporting that the company will look to create a pill version of an already successful fungal infection drug that is only available as a liquid.


• U.S. Steel X shares fell 1.03 percent pre-market on global growth fears as investors fear that steel demand will slow if the economy does not grow as much as previously thought.

Earnings

Notable companies expected to report earnings Friday include:

• J.P. Morgan Chase JPM is expected to report first quarter EPS of $1.39 vs. $1.19 a year ago.


• Wells Fargo WFC is expected to report first quarter EPS of $0.88 vs. $0.75 a year ago.

Economics

On the economics calendar Friday, producer prices and retail sales are due out as well as consumer sentiment and business inventories. At 12:30 pm eastern, Fed Chairman Ben Bernanke is expected to speak at the community development conference in Washington.

Good luck and good trading.