Asia: Japan +0.4% to 20059. Hong Kong flat at 28443. China -1.1% to 4476. India +0.8% to 27396.
Europe: London -0.8%. Paris -1%. Frankfurt -0.7%.
Futures: Dow -0.2%. S&P -0.2%. Nasdaq -0.1%. Crude -0.3% to $56.81. Gold -0.2% to $1200.30.
Ten-year Treasury Yield +1 bps to 1.92%
FOMC meeting begins
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 Richmond Fed Mfg.
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
1:00 PM Results of $35B, 5-Year Note Auction
Consumers confidence fell in April, reflecting a slowdown in hiring and dimmer expectations about economic growth in the months ahead.
U.S. house prices picked up in February, rising 0.5%, according to the S&P/Case-Shiller 20-city composite index released Tuesday. Compared with February 2014, prices for the 20-city index were up 5% — the fastest growth in half a year.
Key earnings before the open
AET, AGCO, AIXG, AKS, ALLY, AMG, AUDC, AUO, AXE, BMY, BP, BSX, CARB, CAS, CBR, CIT, CMI, CNC, CNX, COH, CPLA, CRY, DFRG, DORM, ECL, ENTG, ETR, F, FBC, FDP, FLWS, FMER, GAS, GLW, GPI, HMC, HSP, ICLR, IDXX, IIVI, IPGP, IPI, JBLU, JEC, LRN, LXK, MAS, MDXG, MHFI, MRGE, MRK, NCI, NEO, NOV, OFC, OSK, PAG, PFE, PH, PHG, POR, SALT, SC, SIR, SIRI, ST, SVU, TMUS, TXT, UBSI, UPS, UTHR, VDSI, VLO, WAT, WDR, WHR, WWW, WYN, XRS, YNDX
Key earnings after the close
ACGL, ACHC, AEGN, AFL, AHGP, AKAM, AMCC, ANIK, ARI, ARLP, AUY, AZPN, BGFV, BLDP, BMR, BOOM, BWLD, BXMT, CALX, CBL, CEB, CGI, CHE, CINF, CLF, CMRE, CNL, CRUS, DDR, DHT, EEFT, EIX, EPIQ, EPR, EQR, ESRT, ESRX, EXAC, FARO, FEIC, GNW, GPRE, GPRO, HAWK, HELE, HIW, HLIT, HURN, IACI, IGT, INAP, IPHI, KALU, KBR, KRFT, LOGM, MRCY, MSTR, MTSI, MWA, NANO, NATI, NCR, NVDQ, OHI, OI, OTEX, PEI, PNRA, RNG, RPXC, RRC, RSYS, SKT, SLCA, SWI, TAHO, TE, TPX, TSS, TWTR, ULTI, VRSK, WDC, WRI, WSH, WYNN, X, XCO, XOOM
U.S. stock indexes move lower after disappointing corporate and economic news and ahead of the Federal Reserve’s two-day policy meeting. The Federal Reserve Open Market Committee meeting kicks off on Tuesday, but the interest-rate statement isn’t released until Wednesday afternoon at 2 p.m. Eastern Time. Investors will be looking for clues as to whether a near-term rate hike is still in play, although a large majority of Fed watchers don’t think the central bank will provide any hints, preferring to keep all options on the table.
In his first major television interview since January, Greek PM Alexis Tsipras said on Tuesday he would have to resort to a popular referendum if lenders insisted on “unacceptable” demands, but was confident about striking a deal to avoid such a scenario. Ruling out a default, Tsipras expects an agreement with creditors to happen by May 9, just three days before a €750M debt payment to the IMF is due. The Greek PM also reshuffled his team handling talks with European and IMF lenders.
U.K. GDP expanded slower than expected in the first quarter, dealing a potential blow to PM David Cameron’s Conservative Party just nine days before the country’s general election. GDP grew by 0.3% Q/Q, below a 0.5% forecast, as 0.5% growth in the country’s services industry was offset by a 1.6% fall in the pace of economic output in construction. FTSE 100 -0.8%.
Gold surged above $1,200/oz. on Monday in its best day since January, amid reports Friday that Venezuela’s central bank had converted 1.4M oz. of its gold reserves into at least $1B in cash through a swap with Citibank. Despite taking a huge potential seller taken out of the market, other gold watchers say the bigger factor driving prices was the expiration of May options and short covering.
China’s central bank is planning to launch a new credit-easing program in the next couple of months, WSJ reports, saying the PBOC will allow Chinese banks to swap local-government bailout bonds for loans to boost liquidity and lending. The plan, dubbed Pledged Supplementary Lending, is similar to the long-term refinancing operations, or LTROs, used by the European Central Bank.
Fund manager assets in Europe are catching up with their U.S. counterparts following a 15% jump in money under management, and it looks as though the ECB’s bond-buying program can only help the industry. Compared to the €23T held in the U.S., European AUM spiked to €19T in 2014, up from €16.5T the previous year.
President Obama warned that China would step into the economic vacuum the U.S. would create if it failed to enact the Trans-Pacific Partnership – a proposed 12-nation trade deal with Asia. The president and his negotiators are also fighting for “fast track” legislation to expedite approval of the deal later this year.
Apple (AAPL) gains after largely beating estimates with second-quarter earnings of $2.33 per share on revenue of $58B. 61.2M iPhone sales (+40%) during the quarter shot gross margin up 150 bps Y/Y to 40.8% vs. guidance of 38.5%-39.5%. Apple also raised its dividend 11% and said it would increase its capital return program from $130B to $200B. Additionally, Morgan Stanley lifted its price target on Apple to $166 from $160 and said the company is among its “best idea” stocks.
Due to the dramatic fall in oil prices, BP (BP) posted a sharp drop in first-quarter profit, but the results beat analyst estimates due to a larger than expected increase in refining revenue. Underlying replacement cost profit – which takes into account the fluctuations in the price of oil – came in at $2.58B, down from $3.22B a year earlier, but above the $2.24B reported last quarter. Production for the period was 8.3% higher than the first quarter of 2014 at 2.31B barrels of oil equivalent a day. BP +3.1% premarket.
Coach (COH) slumped 7.9% after the luxury-goods retailer topped fiscal third-quarter profit expectations, but missed on sales.
After fighting off a hostile bid from Charter Communications (CHTR) just over a year ago, Time Warner Cable (TWC) is now open to merger talks with the cableco following Comcast (CMCSA) calling off its $45B pursuit. However, one key change from before is that the deal would have to be significantly sweeter. Charter’s previous hostile bid for TWC was for about $132.50/share, while Comcast’s offer valued the company at around $158.82/share.
DuPont’s board is open to a negotiated settlement with activist Trian Fund Management. Yesterday, proxy advisory firm ISS recommended Trian’s co-founder Nelson Peltz for a spot on DuPont’s (DD) board, pushing the stock up 4.6% and dealing a severe blow to the firm ahead of a shareholder vote in May. Trian, DuPont’s fifth-largest shareholder, has long-argued that the conglomerate should split itself up to unlock better value for shareholders.
Ford (F) said profit was down 7% in the first quarter as profitability in North America and Asia was offset by losses in Europe and South America. Shares were little-changed.
Taking on domestic rivals in the smart hardware space, Tencent (TCEHY) has launched an operating system for internet-connected devices such as TVs and watches that will be open to all developers. Tencent Operating System and TOS+ mirrors Google’s (GOOG, GOOGL) Android mobile OS, and will allow manufacturers and developers to freely use the platform if they agree to share revenue.
A few months after Dish Network made surprise bids in the FCC’s AWS-3 wireless spectrum auction, the FCC is considering a rejection of the company’s $3.3B in small-business discounts. Competing bidders including T-Mobile (TMUS), AT&T (T) and Verizon (VZ) have raised loud complaints about Dish’s (DISH) use of two designated entities, SNR Wireless and Northstar Wireless, for a $13.3B bid for spectrum, although it would only pay $10B. FCC Chairman Tom Wheeler also reportedly told his staff after the auction that something did not “smell right.”
Honda forecast a scant 0.4% rise in net profit for the financial year that began on April 1, giving a light outlook after falling short on its guidance last year. Quality problems plagued the automaker during the 2014/15 period, as delayed vehicle development and quality controls hampered sales. Honda (HMC) now expects to report a net profit of ¥525B ($4.41B) for the year through next March, assuming a dollar rate of ¥115 and a euro rate of ¥125.
Merck (MRK) gains 5.1% after raising its earnings guidance for the full year despite the negative impact of the stronger dollar.
Although it was meant to close a chapter of a sprawling corruption scandal, Petrobras’ (PBR) recent $17B write-down may provide fresh ammunition for a U.S. class action lawsuit. The case, filed in Manhattan federal court in December by a group of large investors, alleges $98B of the company’s ADRs and bonds were artificially inflated since 2010 by the company overstating the value of its assets.
Pfizer (PFE) reported a slight rise in first-quarter profit, but trimmed its full-year outlook. Shares climbed 0.5%.
Shares of Whirlpool (WHR) dropped 6.4% after the home-appliances maker cut its full-year earnings guidance.