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Market Primer: Friday, May 10

Published 05/10/2013, 07:46 AM
Updated 05/14/2017, 06:45 AM
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Futures Slightly Higher On Yen Weakness

U.S. equity futures rose slightly in early pre-market trade although the story was all about the yen overnight. The yen continued to weaken against the dollar overnight as the USD/JPY rose above 101 on new reports that Japanese citizens are starting to buy foreign assets, a key sign that the yen devaluation is working and is sustainable.

Top News
In other news around the markets:

  • Germany's trade balance was reported as better than expected at 17.6 billion euros vs. the forecast of 16.5 billion euros in March. However, the data represents a drop from February's upwardly revised 17.7 billion euros.
  • An investor group led by Carl Icahn and Southeastern Asset Management are offering an alternative buyout solution to Dell's (DELL) woes. The two are offering $12 per share to current investors with the option for them to also keep their stock.
  • Bloomberg reported overnight that Yahoo! (YHOO) is looking to buy Hulu to add video services to its platform.
  • S&P 500 futures rose 1.7 points to 1,626.30.
  • The EUR/USD was lower at 1.3012.
  • Spanish 10-year government bond yields fell 2 basis points to 4.17 percent.
  • Italian 10-year government bond yields fell 3 basis points to 3.85 percent.
  • Gold fell 1.37 percent to $1,448.50 per ounce.
Asian Markets

Asian shares were higher led by Japanese stocks as the yen continued to weaken, boosting hopes that Japan's easing efforts will work. The Japanese Nikkei Index rose 2.93 percent and the Shanghai Composite Index rose 0.62 percent while the Hang Seng Index gained 0.47 percent. Also, the Korean Kospi fell 1.75 percent and Australian shares gained 0.15 percent.

European Markets
European shares were also higher overnight on the back of Asian strength. The Spanish Ibex Index rose 0.34 percent and the Italian FTSE MIB Index rose 1.23 percent. Meanwhile, the German DAX gained 0.53 percent and the French CAC 40 added 0.51 percent while U.K. shares gained 0.34 percent.

Commodities
Commodities were lower overnight with the key theme being dollar strength weighing on commodities broadly. WTI Crude futures fell 0.73 percent to $95.69 per barrel and Brent Crude futures fell 0.44 percent to $104.01 per barrel. Copper futures rose marginally by 0.04 percent to $334.20 per pound. Gold was lower and silver futures fell 1.13 percent to $23.64 per ounce.

Currencies
Currency markets showed broad dollar strength overnight, not just against the yen, as dollar strength continued as the major theme from Thursday's trading. The EUR/USD was lower at 1.3012 and the dollar rose against the yen to 101.24. Overall, the Dollar Index rose 0.18 percent on strength against the yen, the Swiss franc, the pound, the euro, and the Canadian dollar.

Earnings Reported Yesterday
Key companies that reported earnings Thursday include:
Priceline.com (PCLN) reported first quarter EPS of $5.76 vs. $5.27 expected. However, the company slashed Q2 guidance to $8.87-$9.45 EPS vs. the forecast of $9.58 per share.NVIDIA (NVDA) reported first quarter EPS of $0.18 vs. $0.15 on revenue of $954.7 million vs. $940.7 million expected.Apache (APA) reported first quarter EPS of $2.02 vs. $2.21 expected and announced a 30 million share buyback program.Pre-Market Movers
Stocks moving in the pre-market included:
Priceline.com (PCLN) shares fell 2.73 percent pre-market on the guidance cut.Dell (DELL) shares rose 1.5 percent pre-market on the Icahn news.J.P. Morgan Chase (JPM) shares declined 1.04 percent pre-market after the state of California accused the company of illegal debt collection practices.Gap (GPS) shares rose 7.19 percent pre-market after the company reported strong April same-store-sales and raised Q1 EPS guidance to $0.68-$0.69 vs. the forecast of $0.56.Earnings
Notable companies expected to report earnings Friday include:
Horizon Pharmaceuticals (HZNP) is expected to report a first quarter loss of $0.35 per share vs. a loss of $0.98 per share a year ago.Sketchers (SKX) is expected to report first quarter EPS of $0.19 vs. a loss of $0.07 per share a year ago.ArcelorMittal (MT) is expected to report a first quarter loss of $0.05 vs. EPS of $0.01 a year ago.Silver Wheaton (SLW) is expected to report first quarter EPS of $0.40 vs. $0.41 a year ago.Economics
On the economics calendar Friday, Chicago Fed President Charles Evans and Fed Chairman Ben Bernanke are set to speak followed by Kansas City Fed President Esther George. In addition, the Canadian employment report and the ECRI Weekly report are due out. Early Monday, Chinese fixed asset investment, industrial production, and retail sales are all due out.

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