Market Snapshot
Asia: Japan -0.15% to 19908. Hong Kong +1.2% to 28835. China +1.9% to 4034. India -0.2% to 28836.
Europe: London +0.4%. Paris +0.4%. Frankfurt +1.1%.
Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude -1.0% to $50.30. Gold +0.75% to $1202.60.
Ten-year Treasury Yield flat at 1.96%.
Economic News
8:00 Fed’s Lacker Speaks on the U.S. Economic Outlook
8:30 Import/Export Prices
2:00 Federal Budget
Key earnings before the open
DCO
Markets
After initially drifting lower, U.S. stock-futures indexes turned slightly higher in the premarket as General Electric (GE) announced a comprehensive restructuring plan, including a sale of the bulk of its financial business and a hefty stock repurchase initiative. A key driver today: a Jeffrey Lacker speech that could shed more light on the Federal Reserve’s timing of the first rate hike.
The Nikkei retreated from a 15-year high after briefly breaking above 20K overnight. Local traders said persistent demand for stocks through systemic futures buying is causing the most recent surge, which has the index higher by nearly 15% so far this year. Markets globally are more central bank policy-driven than ever, which has sent stock valuations to sky-high levels.
Central banks cut their euro holdings by the most on record last year to help mitigate losses ahead of the ECB’s QE. The euro now accounts for just 22% of global reserves, down from 28% before the EU’s debt crisis five years ago, according to the IMF. The numbers may be music to Mario Draghi’s ears – a cheaper currency is theoretically a more competitive one – but Mizuho suggests the euro’s slipping popularity suggests a more lasting loss of confidence in the EU economy.
IDC estimated PC sales were weak in Q1, with shipments falling 6.7% from a year ago compared to a 2.4% decline in Q4, and 1.7% slides in Q3 and Q2. IDC also reported price pressure, meaning the fall in revenue could be even greater. Gartner – which estimated a 5.2% decline in shipments in Q1 – thinks sales of “mobile PCs” (notebooks, convertibles, and Windows tablets) rose, while desktop sales fell sharply.
Stocks
Apple (AAPL) is in the spotlight this morning as the tech giant kicked off preorders of its Apple Watch.
Citrix Systems (CTXS) fell 5.7% after the software company late Thursday lowered its first-quarter profit and sales outlook.
Continuing its effort to be less a financial company and more an industrial one, General Electric (GE) is near a deal to sell $26B of its $30B in real estate holdings. The potential buyers of the portfolio – which includes office buildings, shopping malls, and other commercial property globally – are reportedly Blackstone (BX) and Wells Fargo (WFC).
California’s Public Utilities Commission voted unanimously to levy $1.6B in penalties against PG&E (PCG) for alleged violations involving the deadly natural gas pipeline explosion that rocked San Bruno in 2010. Of the $1.6B, $850M is earmarked for gas pipeline safety improvements, $400M will be rebated to the utility’s gas customers, and $300M will go directly to California state coffers.
Ruby Tuesday (RT) rallies 4.7% after the restaurant chain late Thursday said sales for the fiscal fourth quarter and full-year same-restaurant sales were likely to be flat or to decline 1%.
The FAA boosted oversight of United Continental Holdings (UAL) two months ago, citing risks from repeated violations of mandatory pilot qualification and scheduling requirements. A Feb. 6 letter from a high-ranking FAA official to United’s top safety officer called for a thorough overhaul of parts of the airline’s process for qualifying crew members. The regulator’s action followed a January safety warning from UAL to its pilots after four recent and separate “safety events and near misses.” The FAA letter didn’t involve those incidents, but instead focused on areas like pilot records and crew-member qualifications.