Benzinga Market Primer: Wednesday, May 1

Futures Higher Ahead of Key Economic Data, Earnings

U.S. equity futures rose in early pre-market trade ahead of key earnings and economic data. The FOMC rate decision and policy statement is due out later today as well as the ISM Manufacturing Index and earnings from many key companies.

Top News

In other news around the markets:

• The Chinese manufacturing sector expanded slower than expected in April as the official manufacturing PMI slipped to 50.6 in April from 50.9 in March and missed forecasts of a reading of 51.0. However, the U.K. manufacturing sector contracted slower than expected in April, as its manufacturing PMI rose to 49.8 from 48.6 on expectations of a reading of 48.5.


• Japanese labor cash earnings fell less than expected from a year ago, showing potential signs of life in the economy following the recent stimulus efforts. Cash earnings fell 0.6 percent in April from the same period a year ago, a slower decline than the 1.2 percent expected drop.


• Japanese investors bought 1.55 billion euros of ESM and EFSF debt in April, showing the beginning of the outflow of money. Outflows of domestic money are a good indicator that Japan's stimulus efforts to inflate itself out of recession through a weaker currency are working.


• S&P 500 futures rose 1.6 points to 1,593.80.


• The EUR/USD was higher at 1.3192.


• Gold rose 0.14 percent to $1,469.40 per ounce.

Asian Markets

Asian shares were once again quiet as Chinese shares remained closed for a week-long holiday and Korean and Hong Kong shares were closed for the May Day holiday. The Japanese Nikkei Index fell 0.44 percent following the weaker than expected Chinese manufacturing PMI. Australian shares also fell 0.48 percent overnight on China fears.

European Markets

European markets were also mostly closed for the May Day holiday, with all major markets save for the U.K. closed. The FTSE 100 Index rose 0.44 percent following the better than expected manufacturing PMI in the U.K. Materials stocks, specifically gold miners and copper miners, were notably strong overnight.

Commodities

Commodities were mostly lower overnight following the weaker than expected Chinese manufacturing PMI, however precious metals did rise in increased central bank easing hopes. WTI Crude futures fell 0.79 percent to $92.72 per barrel and Brent Crude futures fell 0.67 percent to $101.68 per barrel. Copper futures declined 1.11 percent to $315.20, Gold was higher, and silver futures rose 0.47 percent to $24.28 per ounce.

Currencies

Currency markets were quiet overnight despite all of the economic data as many foreign markets were closed. The EUR/USD was higher at 1.3192 and the dollar rose against the yen to 97.60. Overall, the Dollar Index fell 0.18 percent on weakness against the pound, the euro, the Canadian dollar and the Swiss franc.

Earnings Reported Yesterday

Key companies that reported earnings Tuesday include:

• Cummins CMI reported first quarter EPS of $1.44 vs. $1.86 on revenue of $3.92 billion vs. $3.97 billion.


• McGraw-Hill MHP reported first quarter EPS of $0.80 vs. $0.73 on revenue of $1.18 billion vs. $1.17 billion.


• Marathon Petroleum Corp. MPC reported first quarter EPS of $2.17 vs. $2.16 on revenue of $23.3 billion vs. $19.8 billion.


• Valero VLO reported first quarter EPS of $1.18 vs. $0.98 on revenue of $33.47 billion vs. $30.41 billion expected.


• Vertex Pharmaceuticals VRTX reported first quarter EPS of $0.03 vs. an expected loss of $0.19 per share on revenue of $328.4 million vs. $308.02 million.

Pre-Market Movers

Stocks moving in the pre-market included:

• Knight Capital Group KCG shares fell 0.56 percent ahead of its earnings release.


• Vertex Pharmaceuticals VRTX shares rose 0.36 percent pre-market as the company unexpectedly reported a quarterly profit per share.


• Apple AAPL shares rose 0.12 percent pre-market after the company sold $17 billion in bonds of multiple maturities with 10-year yields pricing at 2.415 percent.

Earnings

Notable companies expected to report earnings Wednesday include:

• CBS CBS is expected to report first quarter EPS of $0.68 vs. $0.54 a year ago.


• Chesapeake Energy CHK is expected to report first quarter EPS of $0.25 vs. $0.18 a year ago.


• CVS CVS is expected to report first quarter EPS of $0.79 vs. $0.65 a year ago.


• Facebook FB is expected to report first quarter EPS of $0.13.


• Humana HUMis expected to report first quarter EPS of $1.81 vs. $1.49 a year ago.


• MasterCard MA is expected to report first quarter EPS of $6.17 vs. $5.36 a year ago.


• Time Warner TWX is expected to report first quarter EPS of $0.74 vs. $0.67 a year ago.


• Visa V is expected to report second quarter EPS of $1.81 vs. $1.60 a year ago.

Economics

On the economics calendar Wednesday, MBA Purchase Applications, the ADP Employment Report, and the U.S. Manufacturing PMI kick off the data docket followed by the ISM Manufacturing Index and Construction Spending data. Later this afternoon, the FOMC rate decision and policy statement is set to be released. Overnight, Bank of Canada Governor Mark Carney is expected to speak and Japanese monetary base data is due out. Also, the BoJ minutes, the HSBC China Manufacturing PMI, and the Eurozone Manufacturing PMI are all due out ahead of the ECB rate decision.

Good luck and good trading.