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#PreMarket Primer: Thursday, December 11: Investors Flock To Safer Bets

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#PreMarket Primer: Thursday, December 11: Investors Flock To Safer Bets

With oil prices continuing to free-fall and the global economy still on shaky ground, U.S. investors ditched riskier assets in favor of safer bets. Traders swapped high-yield corporate bonds for government bonds and proceeded with caution. On Wednesday, the Dow Jones Industrial Average fell 1.5 percent, its largest one-day decline since October 9. Many are wary to continue making bets with the global economy still struggling and U.S. growth uneven. 2014 has been a bumper year for stock and bond markets, but many analysts are forecasting a correction on the horizon.

Top News

In other news around the markets:

  • On Wednesday, Google Inc (NASDAQ: GOOG) announced that it would shut down its Google News service in Spain on December 16. The company has been under fire in several European countries lately for its data handling and tax systems, but in Spain new legislation has made it impossible for the news service to continue operating. In January, the Spanish government will require entities that share any part of a publication to pay the publishers a royalty fee. Google released a statement saying that since the News service doesn't generate any income for the company, it will be impossible to continue it under the new law.
  • After two months of demonstrations, pro-democracy protesters in Hong Kong have abandoned their camps and complied with police orders to disperse and allow traffic in the city to resume as normal. The protests against Beijing’s control were some of the largest since the Tiananmen Square pro-democracy demonstrations in 1989. Though the movement in Hong Kong has come to an end, protesters vowed to continue to fight for full democracy, saying that the two months of protest have raised social awareness and lit a fire under those who are tired of living under China’s strict controls.
  • On Wednesday, McDonald’s Corporation (NYSE: MCD) announced its plans to increase sales and improve the customer experience in order to compete with rivals like Subway and Chipotle Mexican Grill Inc (NYSE: CMG). The company will downsize its menu by removing eight food items and five Extra Value Meals, which it says will increase the speed of service and allow room for menu personalization. The fast-food giant is also testing new, more natural choices at several restaurants around the country in order to embrace the healthy eating trend.
  • Demonstrations around the United States continued as large numbers gathered in the nation’s major cities to protest two grand jurys’ decisions not to bring criminal charges against white police officers for their roles in the deaths of two unarmed black men. Protesters in New York demanded that the police force fire Officer Daniel Pantaleo, the policeman whose chokehold killed Eric Garner.

Asian Markets

Asian markets were down across the board with the exception of the Shenzhen composite, which gained 0.88 percent. The NIKKEI fell 0.89 percent, the Shanghai composite was down 0.45 percent, the KOSPI lost 1.49 percent and the Hang Seng index fell 0.90 percent.

European Markets

European markets were mostly higher with the exception of the FTSE and the STOXX 600, which fell 0.26 percent and 0.06 percent respectively. The DAX rose 0.53 percent, the CAC 40 was up 0.12 percent and the MIB rose 0.53 percent.

Commodities

Energy futures made modest gains on Thursday; Brent futures roes 0.76 percent and WTI futures were up 0.54 percent. Gold and silver lost 0.74 percent and 1.18 percent, respectively, and industrial metals were also lower with the exception of copper, which gained 0.29 percent.

Currencies

The euro was steady at $1.2439 and gained 0.60 percent against the yen and 0.27 percent against the pound. The dollar was also higher against the yen, up 0.68 percent, and the greenback gained 0.34 percent against the pound and 0.51 percent against the Australian dollar.

Earnings

Notable earnings released on Wednesday included: 

  • Costco Wholesales Corporation (NASDAQ: COST) reported first quarter EPS of $1.12 on revenue of $26.87 billion, compared to last year’s EPS of $0.96 on revenue of $25.02 billion.
  • Casey's General Stores Inc (NASDAQ: CASY) reported second quarter EPS of $1.28 on revenue of $2.15 billion, compared to last year’s EPS of $1.06 on revenue of $2.02 billion.
  • Toll Brothers Inc (NYSE: TOL) reported fourth quarter EPS of $0.71 on revenue of $1.35 billion, compared to last year’s EPS of $0.54 on revenue of $1.04 billion.
  • The Men’s Wearhouse, Inc. (NYSE: MW) reported third quarter EPS of $0.83 on revenue of $890.60 million, compared to last year’s EPS of $0.90 on revenue of $648.89 million.

Pre-Market Movers

Stocks moving in the Premarket included:

  • Wynn Resorts, Limited (NASDAQ: WYNN) was up 2.08 percent in premarket trade after falling 13.46 percent over the past five days.
  • Transocean Ltd (NYSE: RIG) was up 2.07 percent in premarket trade after losing 11.14 percent over the past week.
  • Citigroup Inc (NYSE: C) gained 1.87 percent in premarket trade after falling 2.47 percent on Wednesday.
  • Applied Materials, Inc. (NASDAQ: AMAT) was down 2.86 percent in premarket trade after losing 2.60 percent on Wednesday.

Earnings

Notable releases expected on Thursday include:

  • Lululemon Athletica inc. (NASDAQ: LULU)  is expected to report third quarter EPS of $0.38 on revenue of $424.77 million, compared to last year’s EPS of $0.45 on revenue of $379.90 million.
  • Quicksilver, Inc. (NYSE: ZQK) is expected to report a fourth quarter loss of $0.11 on revenue of $430.36 million, compared to last year’s loss of $0.04 on revenue of $475.91 million.
  • CIENA Corporation (NASDAQ: CIEN) is expected to report fourth quarter EPS of $0.13 on revenue of $589.44 million, compared to last year’s EPS of $0.32 on revenue of $583.38 million.
  • Adobe Systems Incorporated (NASDAQ: ADBE) is expected to report fourth quarter EPS of $0.30 on revenue of $1.06 billion, compared to last year’s EPS of $0.32 on revenue of $1.04 billion.

Economics

Notable economic releases expected on Thursday include German CPI, French CPI, Italian industrial production, U.S. retail sales, U.S. initial and continuing jobless claims, and Japanese industrial production.

Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin here.

Posted-In: Earnings News Emerging Markets Eurozone Futures Commodities Previews Options

 

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