This week, economic data is expected to confirm once and for all that the US economy is back on solid ground after a shaky first quarter.
After first quarter GDP was revised down last week to show the nation’s largest decline in five years, investors are looking forward to a spate of data due out this week, all expected to paint a rosy picture of the nation’s recovery.
Jobs data due out on Thursday is expected to show gains above 200,000 for the fifth consecutive month, while the unemployment rate is expected to remain constant at 6.3 percent.
The Institute for Supply Management services and manufacturing reports are also expected to post impressive figures with services expected to rise for the fourth consecutive month and manufacturing set to increase for the fifth month in as many.
Top News
In other news around the markets:
- On Monday, the U.S. government is expected to reveal a near $9 billion settlement with BNP Paribas over the bank’s violation of US sanctions. Reuters reported that the bank is expected to plead guilty to the criminal charge and could face a temporary ban on dollar-based transactions, but will hold on to it its New York state banking license.
- Japanese factory output data helped support speculation that the Japanese economy will weather the government’s April tax hike without much damage as it showed a 0.5 percent rise in output. The data supports the Bank of Japan’s optimistic expectations that the nation’s economy will recover from its second quarter slump in the summer.
- Outrage has been the response to news that Facebook manipulated the news feeds of its users to determine whether or not the number of positive or negative posts had an effect on their emotions. The study, conducted on around 700,000 unsuspecting users, has revived concerns about privacy issues as Facebook’s user agreement allows the company a lot of leeway in how it treats its customers.
- On Monday, North Korea said it was going to try two US citizens for unspecified crimes against the state; further pushing back the chances of their return home. The announcement came just one day after the North Korean military defied the UN and fired two short range ballistic missiles.
- Eurozone inflation came in flat at 0.5 percent on Monday, taking some of the pressure off of the European Central Bank to implement a large-scale quantitative easing program. Though the figure remained stable from May to June, it is still far below the region’s two percent target and well below one percent; something the ECB has termed “the danger zone."
Asian Markets
Asian markets were mostly higher with the exception of the Hang Seng index, which fell 0.13 percent. The NIKKEI was up 0.44 percent, the Shanghai composite was up 0.58 percent, the KOSPI gained 0.69 percent and the Shenzhen composite was up 0.80 percent.
European Markets
European markets were mixed; the STOXX 600 was down 0.01 percent, the IBEX lost 0.38 percent and the MIB was down 0.26 percent. However the FTSE gained 0.06 percent and the DAX rose 0.31 percent.
Commodities
Energy futures were lower as supply interruption worries faded; Brent futures lost 0.58 percent and WTI futures were down 0.37 percent. Gold and silver lost 0.47 percent and 1.25 percent respectively and industrial metals were also down across the board. Copper lost 0.05 percent, aluminum was down 0.63 percent and tin fell 0.56 percent.
Currencies
The euro was steady at $1.3654 and gained 0.10 percent against the pound. The dollar lost 0.10 percent against the franc, but gained 0.20 percent against the Australian dollar and 0.09 percent against the pound.
Earnings
Notable earnings released on Friday included:
- Commercial Metals Company (NYSE: CMC) reported third quarter EPS of $0.20 on revenue of $1.80 billion, compared to last year’s EPS of $0.16 on revenue of $1.79 billion.
- KB Home (NYSE: KBH) reported second quarter EPS of $0.27 on revenue of $562.40 million, compared to last year’s loss of $0.04 on revenue of $524.41 million.
- The Finish Line (NASDAQ: FINL) reported first quarter EPS of $0.28 on revenue of $406.50 million, compared to last year’s EPS of $0.20 on revenue of $351.05 million.
Pre-Market Movers
Stocks moving in the Premarket included:
- Yahoo! (NASDAQ: YHOO) was up 1.58 percent in premarket trade after gaining 1.75 percent on Friday.
- KLA-Tencor (NASDAQ: KLAC) was up 0.96 percent in premarket trade after rising 1.44 percent on Friday.
- Pfizer (NYSE: PFE) gained 0.61 percent in premarket trade after losing 0.37 percent last week.
- Perrigo Company (NYSE: PRGO) was down 0.80 percent in premarket trade after falling 1.97 percent on Friday.
Earnings
Notable earnings expected on Monday include:
- Investors Real Estates Trust (NASDAQ: IRET) is expected to report fourth quarter EPS of $0.17 on revenue of $67.73 million, compared to last year’s EPS of $0.19 on revenue of $67.01 million.
Economics
 Notable economic releases on Monday will include Japan’s Tankan survey, China’s HSBC manufacturing PMI, US pending home sales, Italian CPI, British consumer credit, German retail sales, eurozone inflation data.
For a recap of Friday’s market action, click here.
Tune into Benzinga’s #PreMarket Prep today to hear Chris Benedict, Randy Bateman, Raghee Horner and Sean Udall by clicking here!
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