Benzinga Market Primer: Thursday, June 27

Futures Tick Higher On Better Eurozone Confidence Data

U.S. equity futures rose marginally in early pre-market trade following better than expected confidence data in the eurozone and a strong day Wednesday on the "tapering of the tapering" trade as investors fear tapering is further off given weaker than expected data. However, some negative signs from within the U.K. GDP report echoed fears raised by the U.S. GDP report Wednesday.

Top News

In other news around the markets:

• The Eurozone Economic Confidence Index for June rose to 91.3 from 89.4 in May, beating the consensus forecast of 90.3. Industrial and consumer sentiment improved in the month while the services sentiment dropped.


• The U.K. economy grew 0.3 percent in the first quarter, in line with forecasts, but only 0.3 percent from the first quarter a year ago, below the forecast of 0.6 percent growth. Further, real disposable income in the first quarter fell 1.7 percent from the fourth quarter, the largest quarterly drop in 26 years.


• The number of unemployed persons unexpectedly dropped in Germany by 12 thousand vs. an expected rise of 8 thousand in June. The unemployment rate was 6.8 percent, slightly better than the forecast 6.9 percent, as May's unemployment rate was revised down to 6.8 percent from 6.9 percent.


• S&P 500 futures rose 2 points to 1,597.50 but strong technical resistance sits above near 1,602.


• The EUR/USD was higher at 1.3030.


• Spanish 10-year government bond yields fell 5 basis points to 4.8 percent.


• Italian 10-year government bond yields fell 5 basis points to 4.65 percent.


• Gold rose 0.64 percent to $1,237.70.

Asian Markets

Asian shares were mostly stronger overnight save for Chinese stocks as Japanese markets had a strong day on little news. The Nikkei 225 Index gained 2.96 percent and the Topix Index rose 2.76 percent. In Hong Kong, the Hang Seng Index gained 0.5 percent while the Shanghai Composite Index slipped 0.08 percent in China. Also, the Korean Kospi rose 2.87 percent and Australian shares rose 1.68 percent as the country awaits the new government.

European Markets

European shares were mixed overnight as Spanish stocks plunged. The Spanish Ibex Index declined 1.29 percent dragging Italy's FTSE MIB Index lower by 0.26 percent. Meanwhile, the German DAX fell 0.03 percent and the French CAC 40 slipped 0.17 percent while U.K. shares rose 0.34 percent.

Commodities

Commodities were mostly higher overnight as precious metals recovered some of the large losses. WTI Crude futures rose 0.34 percent to $95.82 per barrel and Brent Crude futures rose 0.52 percent to $102.19 per barrel. Copper futures rose 0.87 percent to $306.70 per pound. Gold was higher and silver futures gained 0.63 percent to $18.73 per ounce.

Currencies

Currency markets were once again rather quiet overnight as currency pairs traded in tight bands. The EUR/USD was higher at 1.3030 and the dollar rose against the yen to 98.06. Overall, the Dollar Index fell 0.11 percent on weakness against the euro and the Canadian dollar despite strength against the yen, the pound, and the Swiss franc.

Earnings Reported Yesterday

Key companies that reported earnings Wednesday include:

• General Mills GIS reported fourth quarter EPS of $0.53, in line with estimates, on revenue of $4.41 billion vs. $4.32 billion expected. The company also raised estimates for the full year 2014 and expects EPS of $2.87 to $2.90 vs. the Wall Street estimate of $2.93.


• Monsanto MON reported third quarter EPS of $1.66 vs. $1.61 expected on revenue of $4.25 billion vs. $4.42 billion expected.


• Bed Bath and Beyond BBBY reported first quarter EPS of $0.92 vs. $0.93 expected on revenue of $2.61 billion vs. $2.6 billion expected. The company also sees Q2 EPS between $1.11 and $1.16 vs. the $1.14 estimate.
• Progress Software PRGS reported second quarter EPS of $0.27 vs. $0.22 expected on revenue of $81.7 million vs. $79.04 million expected.

Earnings

Notable companies expected to report earnings Thursday include:

• Accenture ACN is expected to report third quarter EPS of $1.13 vs. $1.03 a year ago on revenue of $7.42 billion vs. $7.15 billion a year ago.


• ConAgra Foods CAG is expected to report fourth quarter EPS of $0.59 vs. $0.51 a year ago on revenue of $4.61 billion vs. $3.41 billion a year ago.


• KB Homes KBH is expected to report a second quarter loss of $0.07 per share vs. a loss of $0.31 per share a year ago on revenue of $450.8 million vs. $302.85 million a year ago.


• Nike NKE is expected to report fourth quarter EPS of $0.75 vs. $0.59 a year ago on revenue of $6.64 billion vs. $6.47 billion a year ago.


• Shaw Communications SJR is expected to report third quarter EPS of $0.44 vs. $0.53 a year ago on revenue of $1.31 billion vs. $1.28 billion a year ago.

Economics

On the economics calendar Thursday, weekly jobless claims and the PCE price index are due out followed by pending home sales and the Kansas City Manufacturing Index. Speeches from Fed members Dudley, Powell, and Lockhart are also expected as well as a 7-year note auction. Overnight, Japanese industrial production, German retail sales, and the Spanish budget statement are due out.

Good luck and good trading.

Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.

For a recap of Monday's market action, read Benzinga's daily market wrap here.