Benzinga Market Primer: Monday, April 22
Futures Higher Following Asian, Yen Strength
U.S. equity futures rose sharply pre-market following strength abroad overnight as Asian and European shares rallied alongside the yen slide. Yen weakness was a key driver of the risk-on environment as the USD/JPY closed in on the key 100 level once again.
In other news around the markets:
- The G20 refrained from openly criticizing Japan's easing moves as manipulating its currency, a key sign that the G20 and other global groups support Japan's efforts to reflate its economy.
- The Wall Street Journal reported overnight that Japan's four largest life insurers are to unveil new investment plans this week. Alongside the government easing program is a private sector investment plan, which could see new money flow into foreign bonds and equities.
- Over the weekend, ECB Board Member Ewald Nowotny spoke saying that a rate cut is not needed yet and that policy needs to take a wait and see approach.
- S&P 500 futures rose 9.1 points to 1,556.70.
- The EUR/USD was fell slightly to 1.3047.
- Spanish 10-year government bond yields fell 10 basis points to 4.53 percent.
- Italian 10-year government bond yields fell 9 basis points to 4.13 percent.
- Gold rose 2.02 percent to $1,423.00 per ounce.
Asian shares were mostly stronger overnight following the news out of Japan over the weekend. The Japanese Nikkei Index rose 1.89 percent overnight while the Shanghai Composite Index slipped 0.11 percent and the Hang Seng Index gained 0.14 percent. Also, the Korean Kospi rose 1.03 percent and Australian shares rose 0.7 percent.
European shares rose in tandem as Italy elected an interim government to set up a new round of elections. The Spanish Ibex Index rose 1.19 percent while the Italian FTSE MIB Index rose 2.33 percent on reduced political uncertainty. Meanwhile, the German DAX rose 0.84 percent and the French CAC rose 0.59 percent and U.K. shares rose 0.86 percent.
Commodities were mostly higher overnight led by gains in precious metals. WTI Crude futures rose 0.44 percent to $88.30 per barrel and Brent Crude futures gained 0.48 percent to $99.89 per barrel. Copper futures declined 0.82 percent to $314.20 on continued supply fears, making a new 2013 low once again. Gold was higher and silver futures rose 1.83 percent to $23.38 per ounce.
Currency markets were in flux overnight and in focus as yen weakness drove broad market gains. The EUR/USD was slightly lower at 1.3047 and the dollar rose against the yen to 99.78 after touching as high as 99.90. Overall, the Dollar Index rose 0.08 percent on strength against the euro, the yen and the Swiss franc.
Earnings Reported Friday
Key companies that reported earnings Friday include:
- General Electric (NYSE: GE) reported first quarter EPS of $0.39 vs. $0.35 expected on revenue of $35.0 billion vs. $34.7 billion expected.
- Honeywell (NYSE: HON) reported first quarter EPS of $1.21 vs. $1.14 a year ago on revenue of $9.33 billion vs. $9.44 billion a year ago.
- McDonald's (NYSE: MCD) reported first quarter EPS of $1.26 vs. $1.27 expected on revenue of $6.61 billion vs. $6.59 billion expected.
- Schlumberger (NYSE: SLB) reported in-line EPS of $1.01 on revenue of $10.67 billion vs. $10.75 billion expected.
- Under Armour (NASDAQ: UA) reported first quarter EPS of $0.07 vs. $0.03 expected on revenue of $472 million vs. $467.57 million expected.
Stocks moving in the pre-market included:
- Newmont Mining (NYSE: NEM) gained 0.85 percent pre-market as precious metals prices attempted to stage a rebound overnight.
- General Electric shares fell 0.69 percent pre-market after CEO Immelt noted European weakness as a hindrance to performance in the previous quarter.
Notable companies expected to report earnings Monday include:
- Ameriprise Financial (NYSE: AMP) is expected to report first quarter EPS of $1.56 vs. $1.45 a year ago.
- Caterpillar (NYSE: CAT) is expected to report first quarter EPS of $1.45 vs. $2.37 a year ago. Investors should watch any comments about Chinese business following the recent weak first quarter GDP data.
- Halliburton (NYSE: HAL) is expected to report first quarter EPS of $0.57 vs. $0.89 a year ago.
- Netflix (NASDAQ: NFLX) is expected to report fourth quarter EPS of $0.18 vs. a loss of $0.08 per share a year ago.
- U.S. Airways (NYSE: LCC) is expected to report first quarter EPS of $0.28 vs. a loss of $0.13 per share a year ago.
On the economics calendar Monday, the Chicago Fed National Activity Index is due out as well as Existing Home Sales. Also, the Treasury is set to auction 3- and 6-month bills. Overnight, the flash China HSBC Manufacturing PMI is due out as well as Flash Manufacturing and Services PMI's for the eurozone, Germany and France.
Good luck and good trading.
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