Benzinga Market Primer, Friday May 31

Futures Lower On Weak European Economic Data

U.S. equity futures lower in early pre-market trade on a batch of weak economic data out of the Eurozone. Although most of the weakness in the data points was expected, the data, including unemployment statistics and German retail sales, pointed to a continued and protracted recession in the Eurozone and placed more pressure on the European Central Bank to continue to support the economy ahead of its next interest rate decision next week.

Top News

In other news around the markets:

• Yen strength dominated overnight on the back of strong economic data out of Japan as the USD/JPY rate fell below 100.50 to as low as 100.30. The pair recently traded above 103.


• The Eurozone's unemployment rate rose to another record level in April as the unemployment rate rose to 12.2 percent from 12.1 percent previously, in line with expectations. Notable weakness was seen in the Italian unemployment report which drove shares lower in Europe.


• The bidding war for Clearwire CLWR continues as Dish Networks DISH increased its bid for the company to $4.40 per share, 29 percent more than Sprint's S bid. The bid includes the just over 50 percent of Clearwire owned by Sprint.


• S&P 500 futures fell 11.3 points to 1,642.30.


• The EUR/USD was lower at 1.2986.


• Spanish 10-year government bond yields fell 1 basis point to 4.35 percent.


• Italian 10-year government bond yields fell 2 basis points to 4.1 percent.


• Gold rose 0.23 percent to $1,415.20 per ounce.

Asian Markets

Asian shares were mixed overnight as Japanese shares recovered some of its large Thursday losses. The Japanese Nikkei Index rose 1.37 percent and the Shanghai Composite Index lost 0.73 percent while the Hang Seng Index declined 0.41 percent. Also, the Korean Kospi rose 0.05 percent and Australian shares declined 0.08 percent.

European Markets

European shares traded mostly lower overnight following some weak economic data. The Spanish Ibex Index declined 1.31 percent and the Italian FTSE MIB Index fell 1.04 percent. Meanwhile, the German DAX declined 1.02 percent and the French CAC 40 lost 1.16 percent as U.K. shares fell 0.99 percent.

Commodities

Commodities were mostly lower overnight save for gold on global growth fears. WTI Crude futures fell 0.74 percent to $92.92 per barrel and Brent Crude futures declined 0.56 percent to $101.62 per barrel. Copper futures declined 0.6 percent to $329.55 per pound on continued supply concerns. Gold was higher and silver futures declined 0.13 percent to $22.66 per ounce.

Currencies

Currency markets saw yen strength overnight but otherwise the dollar was strong against other major partners. The EUR/USD was lower at 1.2986 and the dollar declined against the yen to 100.62. Overall, the Dollar Index rose 0.27 percent on strength against the Canadian dollar, the euro, the pound, and the swiss franc.

Earnings Reported Yesterday

Key companies that reported earnings Thursday include:

• Big Lots BIG reports first quarter EPS of $0.61 vs. $0.61 expected on revenue of $1.31 billion vs. $1.32 billion expected.


• Costco COST reported third quarter EPS of $1.04 vs. $1.03 on revenue of $23.55 billion vs. $24.21 billion expected.
• Guess? Inc. GES reported first quarter EPS of $0.14 vs. $0.08 expected on revenue of $548.9 million vs. $550.06 million expected.


• Joy Global JOY reported second quarter EPS of $1.73 vs. $1.58 expected on revenue of $1.36 billion vs. $1.28 billion expected.


• Palo Alto Networks PANW reported third quarter EPS of $0.06 vs. $0.05 expected on revenue of $101.3 million vs. $103.46 million expected.

Pre-Market Movers

Stocks moving in the pre-market included:

• Palo Alto Networks PANW shares declined 14.97 percent pre-market after its sales forecast missed estimates.


• Guess? Inc.GES shares rose 10.7 percent pre-market after the company beat earnings estimates and guidance also beat estimates.


• Harley-Davidson HOG shares declined 1.64 percent on little news. The stock went ex-dividend earlier this week.

Earnings

Notable companies expected to report earnings Friday include:

• Genesco GCO is expected to report first quarter EPS of $0.87 vs. $0.98 a year ago.

Economics

On the economics calendar Friday, the personal income and outlays report is expected followed by the Chicago PMI and Michigan consumer sentiment. Also, the Fed's Sandra Pinalto is set to speak. In addition, the Canadian GDP report for the first quarter is set to be released. Later tonight, the Chinese Manufacturing PMI is due out.

Good luck and good trading.