#PreMarket Primer: Tuesday, January 21: China's Central Bank Adds Record Amount Of Cash To Markets
The People's Bank of China worked to reduce rates by injecting large amounts of cash into markets on Monday and Tuesday.
The bank surprised investors on Monday with an unexpected shot of yuans and followed up Tuesday with the addition of 255 billion yuan, the largest amount of money the bank has injected in a single day in almost a year.
In other news around the markets:
- The UN was forced to rescind its invitation to Iran to attend peace talks on Syria beginning Wednesday. UN leaders announced that Iran was no longer welcome at the meeting after the Syrian opposition threatened to boycott the talks if Iran was present. Iran has provided Syrian President Bashar al-Assad with everything from arms to cash, making the nation's presence at resolution talks controversial.
- With demand for PCs on the decline, China's Lenovo Group is looking for a new source of growth by expanding its server business. According to the Wall Street Journal, Lenovo is in talks with International Business Machines Corp to buy the company's low-end server business. Last year the two companies worked on a similar deal, but negotiations crumbled as they were unable to agree on valuation. If the deal goes ahead, IBM would have the capacity to focus more intently on its software and services while Lenovo would have the potential to join the ranks of HP and Dell in the servers business.
- Deutsche Bank surprised investors when it announced a 1 billion euro loss in the fourth quarter, but many believe this is just the beginning of the eurozone's banking cleanup. Deutsche Bank's loss was partly the result of the bank's anticipation of upcoming EU balance sheet examinations and could be an ominous sign of things to come in the eurozone's banking sector.
- Despite a disappointing jobs report for December, many see the US Federal Reserve cutting its asset purchase program further at the bank's January meeting next week. The meeting, current Chairman Ben Bernanke's last, is expected take the bank's bond buying purchases down to $65 billion per month from $75 billion per month.
Asian markets were on a high on Tuesday, the Japanese NIKKEI gained nearly 1 percent, China's Shanghai composite was up 0.86 percent and the Shenzhen composite was up 1.16 percent. The Hang Seng index was up 0.61 percent and the South Korean KOSPI gained 0.52 percent.
European markets were moderately lower, the eurozone's STOXX 600 lost 0.03 percent, France's CAC 40 and the Spanish IBEX were down 0.11 percent and the German DAX lost 0.28 percent. However the UK's FTSE gained 0.11 percent.
Energy futures were mixed, Brent futures for March were up 0.23 percent and WTI futures for February lost 0.24 percent. Gold gained 0.12 percent but silver was down 0.46 percent. Industrial metals were down across the board with copper posting the largest loss, down 0.33 percent.
Currency markets were quiet, the euro to dollar ratio was little changed at $1.35 and the pound gained 0.07 percent against the greenback. The dollar gained 0.45 percent against the yen and 0.02 percent against the Australian Dollar.
Stocks moving in the Premarket included:
- Aflac Inc (NYSE: AFL) gained 1.59 percent in premarket trade after losing 0.19 percent on Friday.
- Boston Scientific Corp (NYSE: BSX) gained 1.41 percent in premarket trade after rising 3.05 percent over the past week.
- GameStop Corp (NYSE: GME) gained 1.27 percent in premarket trade after sliding 17.29 percent over the past 5 days.
- Newmont Mining Corp (NYSE: NEM) was up 0.94 percent in premarket trade after rising 3.15 percent over the past week.
Notable earnings releases expected on Tuesday include:
- Johnson & Johnson (NYSE: JNJ) is expected to report fourth quarter EPS of $1.20 on revenue of $17.95 billion, compared to last year’s EPS of $1.19 on revenue of $17.56 billion.
- Verizon Communications Inc. (NYSE: VZ) is expected to report fourth quarter EPS of $0.65 on revenue of $31.04 billion, compared to last year’s EPS of $0.45 on revenue of $30.04 billion.
- The Travelers Company (NYSE: TRV) is expected to report fourth quarter EPS of $1.66 on revenue of $5.79 billion, compared to last year’s EPS of $2.22 on revenue of $5.70 billion.
- Delta Air Lines Inc. (NYSE: DAL) is expected to report fourth quarter EPS of $0.63 on revenue of $9.02 billion, compared to last year’s EPS of $0.28 on revenue of $8.60 billion.
- Halliburton Company (NYSE: HAL) is expected to report fourth quarter EPS of $0.89 on revenue of $7.56 billion compared to last year’s EPS of $0.63on revenue of $7.29 billion.
Tuesday’s economic calendar includes Australian CPI, Canadian Manufacturing sales and the closely watched German ZEW economic sentiment survey.
Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin here.
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