Benzinga Market Primer: Monday, April 1

Futures Lower On Chinese Growth, Italian Political Fears

U.S. equity futures slipped in early pre-market trade Monday as China's economy took a setback in March and Italy's political crisis flared over the weekend. China's manufacturing sector grew slower than expected in March, with the official China Manufacturing PMI rising to 50.9 in March from 50.1 in February on expectations of a reading of 52. Also, the HSBC China Manufacturing PMI for March slipped to 51.6 from 51.7 in February on expectations of a reading of 51.7.

Top News

In other news around the markets:

• Italy's political crisis flared over the weekend as President Napolitano threatened to step down from office early, only to later backtrack on the comments. Should he resign early, it could disrupt the most likely needed next round of elections in Italy.


• Cyprus' President Anastasiades could be thrust to the center of the crisis in the near future as new reports surfaced that his in-laws transferred out of the country 21 million euros just days before the country's banks were shuttered.


• HSBC's Chief Economist Paul Bloxham, in comments on Australia, says that he sees the easing cycle as over and even says that markets could see rate hikes from the RBA as early as Q4 2013. This would be bullish for the Australian dollar and is a bullish signal for the global economy considering Australia's ties to China economically.


• S&P 500 futures fell 2.5 points to 1,560.00.


• The EUR/USD was lower at 1.2816.


• Spanish 10-year government bond yields were flat at 5.06 percent.


• Italian 10-year government bond yields were flat at 4.76 percent.


• Gold rose 0.12 percent to $1,598.00 per ounce.

Asian Markets

Asian shares were lower overnight on weak economic data from both China, with the weaker than expected manufacturing PMI's, and Japan, with the Tanken Industry Surveys showing weakness as well. The Japanese Nikkei Index fell 2.12 percent and the Shanghai Composite Index declined 0.1 percent. Also, the Korean Kospi lost 0.44.

European Markets

European shares were closed Monday for the Easter Monday holiday.

Commodities

Commodities were lower overnight on global growth fears following the weak Asian data. WTI Crude futures declined 0.46 percent to $96.75 per barrel and Brent Crude futures fell 0.33 percent to $109.66 per barrel. Copper futures fell 1.43 percent overnight to $334.95 per pound following weakness in Chinese equities. Gold was higher and silver futures fell 1.14 percent to $27.98 per ounce.

Currencies

Currency markets were mostly flat overnight save for the yen crosses which saw massive yen strength overnight on fears that easing hopes may not be producing results. The EUR/USD was lower at 1.2816 and the dollar fell against the yen to 93.55. Overall, the Dollar Index declined 0.07 percent on weakness against the yen, the pound, and the Canadian dollar. Notably, the major yen crosses all fell below 0.7 percent, showing massive yen strength in an otherwise quiet market.

Pre-Market Movers

Stocks moving in the pre-market included:

• Coca-Cola KO shares rose 0.4 percent pre-market on positive comments from a Motley Fool post highlighting the stock as a favorite of Warren Buffett.


• General Mills GIS shares fell 0.63 percent on fears of inflating input costs as commodities guru Jim Rodgers sees strong inflation in the near future in grains and agricultural commodities.


• Pfizer PFE shares rose 0.14 percent pre-market after last week's European Commission approval of a new leukemia drug called BOSULIF.

Earnings

Notable companies expected to report earnings Monday include:

• Cal-Maine Foods CALM is expected to report third quarter EPS of $1.40 vs. $1.09 a year ago.

Economics

On the economics calendar Monday, Motor Vehicle Sales data will be released throughout the day as well as the Markit U.S. PMI this morning. Also, the ISM Manufacturing PMI is expected to be released and Construction Spending data will also be released. In addition, the Treasury is set to auction 4-week, 3-month, and 6-month bills. Overnight, the RBA will release its interest rate decision, Spanish unemployment, and Eurozone Manufacturing PMIs in Europe will be released.

Good luck and good trading.