Asia: Japan +0.4% to 20551. Hong Kong -2.2% to 27454. China -6.5% to 4620. India -0.2% to 27507.
Europe: London +0.2%. Paris -0.4%. Frankfurt -0.3%.
Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude +0.4% to $57.75. Gold +0.2% to $1188.30.
Ten-year Treasury Yield flat at 2.13%
8:30 Initial Jobless Claims
10:00 Pending Home Sales
11:00 Petroleum Inventories
Key earnings before the open
AMSC, ANF, DANG, EXPR, FLO, FRED, IKGH, JKS, MOD, OA, RY, SAFM, SDRL, SIG, TD, TECD, TITN, XCRA
Key earnings after the close
AVGO, BLOX, DECK, EXA, GME, OVTI, PSUN, SPLK, ULTA, VEEV
U.S. stocks opened slightly lower on Thursday as investors grappled with comments from Federal Reserve officials about possibility of raising interest rates this year. Market reaction to weekly jobless claims data was mostly muted. A jump in weekly jobless claims was bigger than expected, however, the pace of layoffs still remained near a record low.
The Shanghai Composite has ended a seven-day winning streak with a bang, wiping out 6.5% to record its second-worst session of 2015, while the tech-heavy Shenzhen Composite lost 5.5% – its third biggest fall in five years. Until Thursday China’s benchmark index had surged more than 50% this year, despite widespread concerns that the market was in bubble territory. The plunge also highlighted the warnings Credit Suisse gave clients earlier this week: “At some point, there will be a massive correction of these stocks, in our view. Avoid this space!!!”
Japanese shares rose for a 10th session today as the yen traded at its lowest level since 2002 on signs the Federal Reserve is preparing to raise rates this year. The Nikkei closed up 0.4% at 20,551 – marking its longest winning streak since a 15-day run that ended in March 1988. Meanwhile, Japan’s retail sales rebounded modestly in the year to April following three straight months of falls, bolstering the case that consumer spending is reviving.
Hopes for a deal between Greece and its international creditors were quickly raised and dashed Wednesday when Greece’s optimism for an agreement was extinguished by European officials – who denied a deal was near. Not only did European Commission Vice President Valdis Dombrovskis say the two sides still had some way to go before any agreement could be concluded, but German Finance Minister Wolfgang Schaeuble also poured cold water on any hopes, saying he was surprised by Athens’ upbeat tone.
The ECB will have to be “very careful” when it unwinds its trillion-euro bond-buying program, a leading member of the central bank’s governing council has warned. “We watch with great interest the American experience,” ECB board member Ewald Nowotny noted, saying he believes “the Fed is doing quite a good job in being very cautious with its policy of tapering.” Since the ECB’s QE program began in March, unexpectedly good economic data from the euro zone has led to some speculation that it might end earlier than its planned September 2016 deadline.
Avago Technologies said it would buy rival chip maker Broadcom Corp. for $37 billion in cash and stock. Avago (AVGO) is currently worth $35.1B, and Broadcom (BRCM) $32B. Over the past 18 months, Avago has bought a string of companies amid a massive chip industry consolidation wave, and has been rumored to be eying several others. Broadcom was the biggest gainer on the S&P yesterday, surging more than 20%, while Avago rose about 8%.
Apple (AAPL) is “readying a major new iOS initiative codenamed ‘Proactive,’ which will leverage Siri, Contacts, Calendar, Passbook, and third-party apps to create a viable competitor to Google Now (GOOG, GOOGL). Like Google Now, Proactive will automatically provide timely information based on the user’s data and device usage patterns. Apple’s operations boss Jeff Williams also dropped a hint that the company is working on an electric vehicle during a Code Conference yesterday, declaring the car to be “the ultimate mobile device.”
Chevron shareholders have voted to give large investors the power to nominate directors to the company’s board, granting stakeholders the right known as “proxy access”. The rule would allow investors who have owned 3% or more of Chevron’s (CVX) shares for at least three years to nominate directors for up to a quarter of the current board’s seats. A similar resolution came close to passing at Exxon Mobil’s (XOM) annual meeting, but was only supported by 49.4% of the shares voted.
The world’s most popular sport was plunged into turmoil on Wednesday as U.S. authorities announced charges against nine FIFA officials and five sports executives, alleging they were part of a scheme in which more than $150M in bribes were paid in exchange for the commercial rights to soccer tournaments. The bribes were reportedly paid using accounts at major global banks, raising the prospect that Wall Street could be in the spotlight again over its involvement in yet another scandal. Banks involved: JPMorgan (JPM), Citigroup (C), HSBC, BofA (BAC), UBS and Julius Baer (JBAXY). Nike (NKE), which also might be in the hot seat, said it would cooperate with authorities.
Fitbit, on the verge of its IPO, has been accused by archrival Jawbone of “systematically plundering” employees and confidential information, costing the latter “hundreds of millions of dollars.” The case is Fitbit’s (Pending:FIT) latest legal challenge after a large number of consumers filed lawsuits against it last year relating to the recall of its Force wristband, which caused skin irritation to some customers.
Bankruptcy Judge Robert Gerber has now put the dozens of lawsuits accusing GM (GM) of concealing an ignition-switch defect on hold while plaintiffs in those cases appeal his earlier ruling that found their cases barred. On April 15, Gerber ruled that GM was protected from claims on vehicles pre-dating its 2009 exit from Chapter 11 bankruptcy, and said that plaintiffs would need to file their claims instead against the financially limited “Old GM.”
Also at the Code Conference: GoPro (GPRO) CEO Nicholas Woodman said his company is working on a quadcopter drone and will introduce a six-camera device to capture 360-degree spherical video. “It’s incredible to see our world from new perspectives. It’s a real ‘Oh my God’ moment…”We did that with our GoPro cameras, and we see a similar opportunity in the quadcopter market,” Woodman announced.
Hong Kong’s markets regulator has confirmed it’s investigating Hanergy Thin Film Power (HNGSF), brushing aside a denial from the chairman of the solar company that a probe was underway. Hanergy is under the spotlight after its shares crashed on May 20, tumbling almost 50% (erasing $19B in market value) in about half an hour before trading was suspended. The move also sparks the possibility of an additional probe into Goldin Financial (GDFNF) and Goldin Properties, which experienced similar plunges in Hong Kong trading the next day.
“God knows how any of you can place your vote based on ISS or Glass Lewis,” said JPMorgan (JPM) CEO Jamie Dimon, chiding “lazy” investors who pay too much heed to proxy advisors. “If you do that, you are just irresponsible, I’m sorry. And you probably aren’t a very good investor, either.” At the company’s annual meeting last week in Detroit, JPMorgan’s compensation for top executives was endorsed by only 61% of votes cast. A call for separation of the posts of CEO and chairman after Dimon leaves was backed by 36%.
Expanding its Takata recall yet again, Honda (HMC) is now calling back about 340K more cars in Japan to replace the air bag supplier’s faulty inflators. Takata (TKTDY) previously indicated it still hasn’t got to the root cause of the defect, leading many to question the purpose of it replacing the flawed part.