Benzinga Market Primer, Tuesday, December 11
Futures Rise on Global Growth Bets
U.S. equity futures rose in pre-market trading on renewed hopes of global growth following the strong German ZEW Economic Survey release. The survey, a key indicator of German and European growth, rose to 6.9 in December from -15.7 in November and better than economist forecasts of a -12.0 reading.
In other news around the markets:
- Former Italian Prime Minister Silvio Berlusconi, now that he has reinserted himself into the upcoming elections in April, said overnight that Monti's government had followed a German-centric economic model, taking Italy into recession. He is organizing a coalition to try to win a majority in the elections.
- Spain sold 3.89 billion euros of 12- and 18-month bills, more than the targeted 3.5 billion euros, with yields falling and demand appearing strong.
- Credit Suisse (NYSE: CS ) is the latest bank to jump on the layoff train, announcing 120 job cuts this morning.
- S&P 500 futures rose 3.2 points to 1,423.40.
- The EUR/USD was higher at 1.2971.
- Spanish 10-year government bond yields fell to 5.506 percent.
- Italian 10-year government bond yields fell to 4.736 percent.
- Gold fell 0.19 percent to $1,711.10.
Asian shares were mixed overnight as strength in smaller markets was offset by losses in Japan and China. The Japanese Nikkei Index fell 0.09 percent while the Shanghai Composite Index fell 0.44 percent and the Hang Seng Index rose 0.21 percent. In addition, the Korean Kospi rose 0.37 percent and Australian shares rose 0.4 percent.
European shares reversed Monday's losses as fears over Italy's political crisis receded slightly overnight. The Spanish Ibex Index rose 1.01 percent and the Italian MIB Index rose 0.99 percent on reduced fears in Italy. Meanwhile, the German DAX rose 0.49 percent on the strong economic survey while the French CAC rose 0.59 percent and U.K. shares rose 0.18 percent.
Commodities were mixed overnight as energy futures rose and metals futures fell. WTI Crude futures rose 0.5 percent to $85.99 per barrel and Brent Crude futures rose 0.75 percent to $108.13 per barrel. Copper futures slipped 0.16 percent to $370.00 per pound as Chinese shares slipped. Gold was lower and silver futures fell 0.64 percent to $33.17.
Currency markets were in risk-on mode as traders sold the dollar and the yen and piled into risk assets. The EUR/USD was higher at 1.2971 and the dollar rose against the yen to 82.51. Overall, the Dollar Index slipped 0.13 percent on weakness against the euro, the pound, and the Swedish krone. However, the dollar was higher against the Swiss franc, with both currencies' central banks meeting this week. The AUD/USD bounced back after selling off overnight and the AUD/JPY rallied 0.23 percent.
Stocks moving in the pre-market included:
- Groupon (NASDAQ: GRPN ) shares rose 1.19 percent after falling over 9 percent Monday as investors discounted the chances of a takeover in the company that was widely rumored Friday.
- Zynga (NASDAQ: ZNGA ) shares rose 1.03 percent in the pre-market as investors bought the stock in hopes that the company's move into real-money gaming will benefit shares.
- McDonald's (NYSE: MCD ) shares rose 0.67 percent pre-market after the company reported much better than expected November comps Monday, with same store sales rising 2.4 percent vs. an estimated 0.2 percent rise.
- AIG (NYSE: AIG ) shares fell 0.33 percent pre-market as the Treasury is selling a further part of its stake in the insurer.
Notable companies expected to report earnings Tuesday include:
- Dollar General (NYSE: DG ) is expected to report third quarter EPS of $0.60 vs. $0.50 a year ago.
On the economics calendar Tuesday, the NFIB Small Business Outlook Survey is due out as well as same store sales. In addition, international trade and wholesale trade data are expected to be released. The Treasury is also set to auction 4-week and 52-week bills and 3-year notes.
Good luck and good trading.
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