Benzinga Market Primer: Tuesday, May 21
Although far from anything resembling a correction, the markets ended Monday’s trading session barely in the red on the back of a weak dollar and gold that started the day sharply lower but rebounded.
Tuesday, traders will watch for signs of follow-thru of yesterday’s pullback. Here’s what happened overnight:
- S&P 500 futures are down slightly to 1,661.75.
- The EUR/USD was unchanged at 1.2881.
- German 10-year government bond yields rose 1 basis point to 1.3 percent.
- Italian 10-year government bond yields rose 2 basis points to 3.89 percent.
- Gold fell 0.48 percent to $1,377.40 per ounce.
- JPMorgan Chase (NYSE: JPM) will hold its shareholder meeting in Tampa, Florida today. All eyes will be on the proposal to split the chairman and CEO roles. Chairman and CEO Jamie Dimon had said previously that he may leave the bank if the proposal is approved.
- Apple (NASDAQ: AAPL) CEO Tim Cook will testify before Congress today. On Monday, Reuters reported that Apple has held billions in profits in Irish subsidiaries paying little or no taxes to any government, according to a Senate report.,li>A powerful tornado struck Moore, Oklahoma killing at least 51 and injuring more than 100. Our thoughts and prayers go out to all those affected by this disaster.
The Nikkei began the trading session sharply lower but rose to another high, up 20.21 points or 0.20 percent to 15381.02—catching its breath after a strong Monday.
Other markets were mostly down. The Kopsi is flat, the Shanghai composite was up 0.22 percent, and the ASX 200, the Australian index, was down 0.56 percent.
European shares were mostly lower overnight as investors prepare for key Federal Reserve comments on Wednesday. The Spanish Ibex Index was down 0.92 percent and the Italian FTSE MIB Index lost 0.80 percent. Meanwhile, the German DAX was down 0.52 percent and the French CAC 40 shed 0.40 percent while U.K. shares were flat.
Commodities were mostly mixed overnight with WTI Crude futures falling 0.20 percent to $95.52 per barrel while Brent Crude futures down 0.12 percent to $103.80 per barrel. Copper futures fell 0.12 percent to $335.60 and silver futures continued the selloff down 0.26 percent to $22.64 per ounce.
The Japanese Yen showed continued weakness against the dollar, falling to 102.66—a loss of 0.40 percent. Reports surfaced that Japanese officials said that the currency may have now weakened enough. The GBP/USD was down fractionally at 1.5179, and the EUR/USD was mostly unchanged 1.2881.
Earnings Reported Monday
- Urban Outfitters (NYSE: URBN) reported EPS of $0.32 on revenue of $648.2 million. Analysts expected EPS of $0.29 on revenue of $654.9 million. The stock was down 4.5 percent in after hours trading.
- TiVo (NASDAQ: TIVO) reported Q1 EPS of -$0.09 on revenue of $82.6 million. Analysts expected EPS of -$0.15 on revenue of $20.7 million. The stock was down 4.5 percent in after hours trading. The stock was up 1.1 percent.
- JA Solar Holdings (NASDAQ: JASO) reported Q1 EPS of -$0.85 on revenue of $270 million. Analysts expected EPS of -$1.20 on revenue of $228.97 million. The stock was down 4.5 percent in afterhours trading. The stock was up more than 5 percent after hours.
- Auto Zone (NYSE: AZO) is expected to report fiscal Q3 EPS of $7.23 vs. $6.28 a year ago.
- Best Buy (NYSE: BBY) is expected to report first quarter EPS of $0.25 vs. $0.72 a year ago.
- Home Depot (NYSE: HD) is expected to report first quarter EPS of $0.75 vs. $0.65 a year ago.
- Intuit (NASDAQ: INTU) is expected to report fiscal Q3 EPS of $2.93 vs. $0.51 a year ago.
- Carnival Corp (NYSE: CCL) is down more than 13 percent after reports say the company is cutting prices to attract consumers after a series of embarrassing incidents.
- Newmont Mining Corp (NYSE: NEM) is down more than 3 percent as gold continues to fall and investor sentiment towards the metal is bearish.
API Weekly crude and gasoline inventories will be reported today and FOMC members Bullard and Dudley will speak.
Have a great day and remember not to believe price action that isn’t backed by heavy volume.
Click here to view Benzinga's Market Wrap for Monday, May 20.
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