Benzinga Market Primer: Thursday, August 8: Futures Higher On China Trade Data

Futures Higher On China Trade Data

U.S. equity futures shrugged off fears of Federal Reserve tapering in early trade and moved slightly higher following a largely better than expected trade report from China for July. Also, the European Central Bank issued its monthly report, revising down growth estimates for the currency zone and also forecasting lower inflation.

Top News

In other news around the markets:

• China's trade balance was reported at $17.82 billion in July, below the consensus forecast of $26.9 billion. However, the trade balance was lower due to stronger than expected imports with imports rising 10.9 percent in July from a year ago vs. the expected 1.0 percent rise while exports rose 5.1 percent vs. the expected 2.0 percent gain.


• The European Central Bank issued its monthly report and cut its growth forecast for the eurozone to -0.6 percent from -0.4 percent for 2013 and 1.0 percent growth to 0.9 percent growth in 2014. Also, the ECB cut its inflation outlook from 1.7 percent to 1.5 percent for 2013 and from 1.6 percent to 1.5 percent for 2014.


• The Bank of Japan kept policy on hold overnight, as expected, but looked content to support Prime Minister Abe's plan of a sales tax hike early next year to plug a budget hole, a move which is seen as threatening the economic recovery.


• S&P 500 futures rose 2.6 points to 1,690.80.


• The EUR/USD was higher at 1.3355.


• Spanish 10-year government bond yields fell 2 basis points to 4.54 percent.


• Italian 10-year government bond yields fell 2 basis points to 4.23 percent.


• Gold rose 0.34 percent to $1,289.70 per ounce.

Asian Markets

Asian shares were mixed overnight with Australia getting a boost from the Chinese imports figure despite a poor employment report. The Japanese Nikkei 225 Index fell 1.59 percent and the Topix Index dropped 1.36 percent. In Hong Kong, the Hang Seng Index rose 0.31 percent while the Shanghai Composite Index fell 0.09 percent in China. Also, the Korean Kospi rose 0.3 percent and Australian shares gained 1.07 percent.

European Markets

European shares were higher following the ECB comments which largely indicated that the ECB may have to do more to stimulate growth across the currency zone. The Spanish Ibex Index rose 0.59 percent and the Italian FTSE MIB Index gained 0.74 percent. Meanwhile, the German DAX rose 0.29 percent and the French CAC 40 gained 0.26 percent while U.K. shares rallied 0.23 percent.

Commodities

Commodities were mixed overnight as oil dropped but copper rallied on the China data. WTI Crude futures fell 0.12 percent to $104.24 per barrel and Brent Crude futures fell 0.34 percent to $107.08 per barrel. Copper futures rallied 2.4 percent to $324.90 per pound. Gold was higher and silver futures gained 1.14 percent to $19.73 per ounce.

Currencies

Currency markets were on the move overnight as the dollar was sold across the board. The EUR/USD was higher at 1.3355 and the dollar was flat against the yen, erasing earlier gains. Overall, the Dollar Index fell 0.12 percent on weakness against the pound, the euro, the Canadian dollar, and the Swiss franc.

Earnings Reported Yesterday

Key companies that reported earnings Wednesday include:

• Tesla TSLA reported second quarter EPS of $0.05 vs. an expected loss of $0.17 per share on revenue of $405.14 million vs. $393.67 million.


• Green Mountain Coffee Roasters GMCR reported third quarter EPS of $0.82 vs. $0.77 expected on revenue of $967.1 million vs. $981.9 million.


• Groupon GRPN reported a second quarter loss of $0.02 vs. an expected profit of $0.02 per share on revenue of $608.7 million vs. $605.54 million expected.


• SolarCity SCTY reported a second quarter loss of $0.43 per share vs. an expected loss of $0.38 per share on revenue of $46.6 million vs. $27.44 million expected.


• Time Warner TWX reported second quarter EPS of $0.83 vs. $0.76 expected on revenue of $7.4 billion vs. $7.1 billion expected.

Pre-Market Movers

Stocks moving in the pre-market included:

• Freeport-McMoRan Copper and Gold FCX rose 1.8 percent pre-market to $29.96 as copper prices rallied on the back of strong Chinese imports.


• Potash Corp. POT shares rallied 1.76 percent pre-market to $30.10 on comments from the CEO that the breakup of the Russian cartel will not have as large of an impact as previously thought.


• Tesla TSLA shares rose 12.15 percent pre-market following the earnings report.


• Groupon GRPN rose 23.51 percent pre-market following its new $300 million share buyback and CEO announcement.

Earnings

Notable companies expected to report earnings Thursday include:

• Priceline.com PCLN is expected to report second quarter EPS of $9.38 vs. $7.35 a year ago on revenue of $1.66 billion vs. $1.33 billion a year ago.


• LinnCo LNCO is expected to report second quarter EPS of $0.33 on revenue of $592.17 million.


• AMC Networks AMCX is expected to report second quarter EPS of $0.79 vs. $0.58 a year ago on revenue of $368.48 million vs. $327.57 million a year ago.


• Molycorp MCP is expected to report a second quarter loss of $0.23 per share vs. a loss of $0.03 per share a year ago on revenue of $157.56 million vs. $104.58 million a year ago.


• Dendreon DNDN is expected to report a second quarter loss of $0.42 per share vs. a loss of $0.65 per share a year ago on revenue of $75.61 million vs. $79.99 million a year ago.

Economics

On the economics calendar Thursday, initial jobless claims are due out followed by a 30-year bond auction. Overnight, Chinese inflation, fixed asset investment, industrial production, and retail sales are all 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 Wednesday's market action, read Benzinga's daily market wrap here.