Benzinga Market Primer, Thursday April 18

Futures Slightly Higher as G20 Agrees to Avoid Competitive Devaluations

U.S. equity futures rose slightly in pre-market trading following the release of a draft G20 statement. In the statement, the G20 agreed to avoid using competitive devaluations as a tool of policy, however the group refrained from singling out any individual countries.

Top News

In other news around the markets:

• Foreign Direct Investment in China rose faster than expected in March, rising at a 5.1 percent annualized rate vs. the forecast 1.9 percent gain.


• Chinese home prices rose in 68 of 70 cities in March, more than the 66 of 70 in February, showing that PBOC tightening is not enough to restrain the booming property market.


• German economists, in a report published overnight, cut their German GDP forecast to 0.8 percent from 1.0 percent. Also, They forecast 1.9 percent growth in 2014 and about 2 percent HCP inflation over the next two years. They are not in favor of a rate cut currently and suggest that the banking regulator be outside the ECB.


• S&P 500 futures rose 2.9 points to 1,549.50.


• The EUR/USD was higher at 1.3055.


• Spanish 10-year government bond yields fell to 4.67 percent from 4.68 percent.


• Italian 10-year government bond yields fell to 4.23 percent from 4.25 percent.


• Gold rose 0.65 percent to $1,386.70 per ounce.

Asian Markets

Asian shares were mostly lower overnight after the G20 statement release despite the statement not singling out Japan. The Japanese Nikkei Index fell 1.22 percent and the Shanghai Composite Index gained 0.17 percent while the Hang Seng Index declined 0.26 percent. Also, the Korean Kospi fell 0.24 percent and Australian shares fell 1.6 percent.

European Markets

European shares were mostly higher in early trade following some strong bond auctions from France and Spain and on the German economic forecasts. The Spanish Ibex Index rose 0.94 percent and the Italian FTSE MIB Index rose 0.99 percent. Meanwhile, the German DAX rose 0.69 percent and the French CAC rose 0.97 percent while U.K. shares gained 0.37 percent.

Commodities

Commodities were mostly higher overnight as oil bounced back from its recent steep declines. WTI Crude futures rose 1.11 percent to $87.40 per barrel and Brent Crude futures gained 1.36 percent to $100.39 per barrel. Copper futures fell 1.08 percent to $315.20 per pound on continued supply fears. Gold was higher and silver futures rose 0.87 percent to $23.39 per ounce.

Currencies

Currency markets were rather calm overnight after two days of large moves in the overnight sessions. The EUR/USD was higher at 1.3055 and the dollar rose against the yen to 98.27. Overall, the Dollar Index fell 0.15 percent on weakness against the euro, the Canadian dollar, and the Swiss franc.

Earnings Reported Yesterday

Key companies that reported earnings Wednesday include:

• American Express AXP reported first quarter EPS of $1.15 vs. $1.12 expected on revenue of $7.88 billion vs. $8.05 billion expected.


• Bank of America BAC reported first quarter EPS of $0.20 vs. $0.22 expected on revenue of $23.85 billion vs. $23.5 billion expected.
• eBay EBAY reported adjusted EPS of $0.63 vs. $0.62 on revenue of $3.7 billion vs. expectations of $3.76 billion. Also, guidance was reaffirmed while the street was looking for a guidance raise.


• Sandisk SNDK reported first quarter EPS of $0.84 vs. $0.77 expected on revenue of $1.34 billion vs. $1.3 billion expected.

Pre-Market Movers

Stocks moving in the pre-market included:

• eBay (NASDAQ: eBAY) shares fell 2.35 percent pre-market after the bottom line beat and top line miss and the guidance miss.


• Carnival Corp. CCL shares rose 1.87 percent pre-market after the company announced new plans to invest in emergency preparedness protocols.


• Sandisk SNDK shares rose 1.31 percent pre-market following the earnings.


• Theravance THRX shares rose 18.71 percent pre-market after the FDA Advisory Committee recommended Breo for the treatment of COPD.

Earnings

Notable companies expected to report earnings Thursday include:

• The Blackstone Group BX is expected to report first quarter EPS of $0.51 vs. $0.44 a year ago.


• Chipotle NYSE: CMG) is expected to report first quarter EPS of $2.14 v.s $1.97 a year ago.


• IBM IBM is expected to report first quarter EPS of $3.05 vs. $2.78 a year ago.


• Morgan Stanley MS is expected to report first quarter EPS of $0.58 vs. a loss of $0.06 per share a year ago.


• Google GOOG is expected to report first quarter EPS of $10.69 vs. $10.08 a year ago.


• Microsoft MSFT is expected to report first quarter EPS of $0.76 vs. $0.60 a year ago.


• Pepsico PEP is expected to report first quarter EPS of $0.71 vs. $0.69 a year ago.


• UnitedHealth Group UNH is expected to report first quarter EPS of $1.14 vs. $1.31 a year ago.


• Union Pacific UNP is expected to report first quarter EPS of $1.97 vs. $1.79 a year ago.

Economics

On the economics calendar Thursday, initial jobless claims are due out as well as the Philly Fed Survey, Leading Indicators, and the Bloomberg Consumer Comfort Index. Also, Fed members Kocherlakota and Raskin are set to speak. In addition, the Treasury is set to auction 5-year TIPS. Overnight, German inflation as well as Spanish industrial data are due out.

Good luck and good trading.