Benzinga Market Primer: Thursday, May 9


Futures Lower After New Record Highs

U.S. equity futures traded lower in early pre-market trade after the S&P 500 made new record highs again Wednesday. However, strength in bonds and the yen could have been precursors to a pull-back, which many analysts would see as healthy at these levels.

Top News

In other news around the markets:

Industrial production in the U.K. rose faster than expected in March, growing 0.7 percent compared to forecasts of a rise of 0.2 percent. The European Central Bank slashed its growth forecasts for the eurozone, cutting its 2013 growth forecast to -0.4 percent from 0.0 percent and its 2014 forecast to 1.0 percent from 1.1 percent. Australia added a whopping 50,100 new jobs in April compared to forecasts of just 11,000 jobs added with the unemployment rate falling to 5.5 percent from 5.6 percent. S&P 500 futures fell 2 points to 1,626.70. The EUR/USD was lower at 1.3140. Spanish 10-year government bond yields were flat at 4.09 percent. Italian 10-year government bond yields fell 1 basis point to 3.83 percent. Gold fell 0.33 percent to $1,468.60.

Asian Markets

Asian shares were mostly lower overnight following mixed Chinese inflation data. The Japanese Nikkei Index fell 0.66 percent and the Shanghai Composite Index declined 0.59 percent while the Hang Seng Index lost 0.14 percent. Also, the Korean Kospi rose 1.18 percent as the Bank of Korea cuts its key lending rate by 25 basis points and Australian shares fell 0.03 percent.

European Markets

European shares were lower in early trade following the downgraded forecasts from the European Central Bank and ahead of the Bank of England's interest rate decision. The Spanish Ibex Index fell 0.67 percent while the Italian FTSE MIB Index declined 1.2 percent. Meanwhile, the German DAX fell 0.18 percent and the French CAC 40 declined 0.99 percent while U.K. shares lost 0.08 percent.


Commodities were mostly lower overnight following the slightly softer than expected wholesale inflation data from China. WTI Crude futures fell 0.56 percent to $96.08 per barrel and Brent Crude futures declined 0.48 percent to $103.84 per barrel. Copper futures fell 1.23 percent to $332.90 per pound. Gold was lower and silver futures gained 0.14 percent to $23.96 per ounce.


Currency markets were relatively quiet overnight as the Australian dollar and the yen led gainers while the euro slumped. The EUR/USD was lower at 1.3140 and the dollar fell against the yen to 98.68. Overall, the Dollar Index rose 0.06 percent on strength against the euro, the Swiss franc, and the Canadian dollar. Notably, the Australian dollar was strong across the board following the employment data and the cable rose ahead of the Bank of England's interest rate decision.

Earnings Reported Yesterday

Key companies that reported earnings Wednesday include:

Tesla (NASDAQ: TSLA ) reported first quarter EPS of $0.12 vs. $0.04 expected on revenue of $562.0 million vs. $492.02 million expected. CEO Elon Musk said that better pricing from suppliers helped margins. Monster Beverage (NASDAQ: MNST ) reported first quarter EPS of $0.37 vs. $0.46 on revenue of $484.2 million vs. $501.74 million expected. AOL (NYSE: AOL ) reported first quarter EPS of $0.41 vs. $0.35 on revenue of $538.3 million vs. $537.15 million expected. Groupon (NASDAQ: GRPN ) reported first quarter adjusted EPS of $0.03, in-line with forecasts, on revenue of $601.4 million vs. $588.92 million. News Corp. (NASDAQ: NWSA ) reported third quarter EPS of $0.36, in-line with forecasts, on revenue of $9.54 billion vs. $9.14 billion expected.

Pre-Market Movers

Stocks moving in the pre-market included:

Tesla (NASDAQ: TSLA ) shares rose over 18 percent pre-market following the better than expected earnings report and comments from CEO Elon Musk. Groupon (NASDAQ: GRPN ) shares rose rose 11.27 percent pre-market following its better than expected earnings report. Monster Beverage (NASDAQ: MNST ) shares declined 12.41 percent pre-market following its weaker earnings report. Yum! Brands (NYSE: YUM ) shares rose 1.4 percent pre-market as inflation in China slows, easing pressure on margins.


Notable companies expected to report earnings Thursday include:

The Carlyle Group (NASDAQ: CG ) is expected to report first quarter EPS of $0.94 on revenue of $795.65 million. DISH Network (NASDAQ: DISH ) is expected to report first quarter EPS of $0.53 vs. $0.80 a year ago. Molycorp (NYSE: MCP ) is expected to report a first quarter loss of $0.27 vs. EPS of $0.18 a year ago. (NASDAQ: PCLN ) is expected to report first quarter EPS of $5.27 vs. $4.28 a year ago.


On the economics calendar Thursday, initial jobless claims are due out followed by wholesale trade data. Also, Fed members Jeffrey Lacker and Charles Plosser are expected to speak. In addition, the Treasury is set to auction 30-year bonds. Across the pond, the Bank of England interest rate decision is due out at 7 am. Overnight, Russia's interest rate decision and an Italian bill auction are expected.

Good luck and good trading.

Click here to view the Market Wrap for Wednesday, May 8.

(c) 2013 Benzinga does not provide investment advice. All rights reserved.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Bonds , Commodities , Futures , International

Referenced Stocks: DISH , MCP , NWSA , PCLN , YUM


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