Benzinga Market Primer: Monday, August 12: Futures Lower After Weak Japan Data

Futures Lower After Weak Japan Data

U.S. equity futures traded lower in early pre-market trade following a much weaker than expected GDP report out of Japan. With little data out today in the U.S. and thin trading volumes due to the time of the year, volatile trading could be on tap.

Top News

In other news around the markets:

• Japan's economy grew 2.6 percent in the second quarter from a year ago, much worse than the forecast of 3.6 percent and below the downwardly revised prior reading of 3.8 percent. However, inflation was reported as higher than expected in the release.


• The Bundesbank issued a report over the weekend citing that Greece may need a third bailout after the German elections in September.


• In order to prop up the Chinese economy, the Agricultural Bank of China made a huge loan to Shanghai, roughly 12.5 percent of the city's GDP, to help fund the building of a Disneyland.


• S&P 500 futures fell 10.7 points to 1,675.50.


• The EUR/USD was lower at 1.33.


• Spanish 10-year government bond yields were flat at 4.49 percent.


• Italian 10-year government bond yields were flat at 4.19 percent.


• Gold rose 1.07 percent to $1,326.30 per ounce.

Asian Markets

Asian shares were mixed overnight as Chinese shares rallied on the stealth stimulus of the large loan while Japanese shares fell on the bad GDP report. The Japanese Nikkei 225 Index fell 0.7 percent and the Topix Index dropped 0.55 percent. In Hong Kong, the Hang Seng Index gained 2.13 percent and the Shanghai Composite Index rose 2.39 percent in China. Also, the Korean Kospi gained 0.22 percent and Australian shares rose 1.06 percent.

European Markets

European shares were lower as the euro dropped on fears that a new fight was set over a third Greek bailout later this year. The Spanish Ibex Index fell 0.35 percent and the Italian FTSE MIB Index dropped 0.7 percent. Meanwhile, the German DAX fell 1.12 percent and the French CAC 40 Index declined 0.67 percent while U.K. shares fell 0.53 percent.

Commodities

Commodities were mixed as precious metals gained on hopes that the Fed will put off tapering the face of weakening global growth and slowing inflation. WTI Crude futures fell 0.08 percent to $105.88 per barrel and Brent Crude futures fell 0.51 percent to $107.67 per barrel. Copper futures were roughly flat while gold was higher and silver futures gained 2.54 percent to $20.93 per ounce.

Currencies

Currency markets were on the move overnight as the dollar gained. The EUR/USD was lower at 1.33 and the dollar rose against the yen to 96.71. Overall, the Dollar Index gained 0.32 percent on strength against the yen, the Swiss franc, the euro, the Canadian dollar, and the British pound.

Earnings Reported Yesterday

Key companies that reported earnings Friday include:

• Brookfield Asset Management BAM reported second quarter EPS of $0.68 vs. $0.40 expected on revenue of $5.17 billion vs. $4.66 billion expected.


• James River Coal Company JRCC reported a second quarter loss of $1.04 vs. a loss of $1.33 per share expected.


• Ebix EBIX reported second quarter EPS of $0.35 vs. $0.32 expected on revenue of $51.0 million vs. $52.0 million.


• Health Management Associates HMA reported second quarter EPS of $0.07 vs. $0.16 expected on revenue of $1.46 billion vs. $1.7 billion expected.


• Tutor Perini Corp. TPC reported second quarter EPS of $0.32 vs. $0.37 expected on revenue of $1.05 billion vs. $1.07 billion expected.

Earnings

Notable companies expected to report earnings Monday include:

• Sysco SYY is expected to report fourth quarter EPS of $0.55 vs. $0.55 a year ago on revenue of $11.62 billion vs. $11.05 billion a year ago.


• InterOil IOC is expected to report a second quarter loss of $0.07 per share vs. a loss of $0.66 per share a year ago on revenue of $261.35 million vs. $299.1 million a year ago.


• Buckeye Technologies BKI is expected to report fourth quarter EPS of $0.56 vs. $0.66 a year ago on revenue of $197.69 million vs. $224.94 million a year ago.


• NQ Mobile NQ is expected to report second quarter EPS of $0.20 vs. $0.14 a year ago on revenue of $39.34 million vs. $19.96 million a year ago.

Economics

On the economics calendar Monday, the weekly 3- and 6-month bill auctions are due out ahead of the Treasury Budget Statement. Overnight, the German ZEW Economic Sentiment Index and the eurozone industrial production report are due out.

Good luck and good trading.

Tune into Benzinga's PreMarket Info show with Dennis Dick and Joel Elconin here.

For a recap of Friday's market action, read Benzinga's daily market wrap here.