Market Snapshot
Asia: Japan +0.7% to 20026. Hong Kong +0.4% to 27693. China +3.2% to 4418. India -0.2% to 27645.
Europe: London +0.3%. Paris +1.8%. Frankfurt +1.9%.
Futures: Dow +0.3%. S&P +0.3%. Nasdaq +0.4%. Crude -0.9% to $59.68. Gold -0.7% to $1219.60.
Ten-year Treasury Yield -1 bps to 2.21%
Economic News
8:30 Housing Starts
8:55 Redbook Chain Store Sales
Key earnings at the open
AINV, CMCM, DKS, EJ, HD, LEJU, RRGB, SSI, TJX, WBAI, WMT
Key earnings at the close
ADI, ADSK, CSC, DY, ETSY, HEI, NDSN, QIHU, TEDU, VSAT
Markets
Wall Street looks set to build on the previous session’s closing highs as investors assess financial results Wal-Mart for insight on consumer spending and look for data on the health of the housing market. U.S. stock-index futures saw steady trading to the upside overnight, gaining early support as European equities rallied after a high-level European Central Bank official, Benoît Coeuré, said the bank will step up its buying of euro-area assets in May and June to compensate for low liquidity in the summer months. The euro tumbled the most it has in two months against the dollar on the news.
Shanghai led Asian markets higher, following a record session for Wall Street and a rebound in the U.S. dollar. After climbing more than a third this year, the Shanghai Composite is poised to soar even further, as investors look forward to more monetary stimulus from Beijing. So far, the biggest winner of the rally has been the Chinese government, which has made billions in paper profits on its stakes in hundreds of listed state-owned corporations.
Four months into negotiations there is still no Greek deal, although the country’s labor minister is maintaining that Athens will soon conclude an agreement with its foreign creditors. “There’s a deadline, which is June 5,” he said – the date on which Greece’s next €1.5B repayment to the IMF falls due.
Founding members of the China-backed Asian Infrastructure Investment Bank will hold a three-day meeting in Singapore this week to discuss the draft articles of agreement and operational policies for the establishment of the institution. Although 57 countries have joined the AIIB as founding members, the U.S., Japan and Canada have remained notable absentees.
Stocks
Starbucks and Spotify have struck a music partnership that will give the coffee chain’s loyalty members access to exclusive content and input on in-store playlists. “This will be the first of many that we believe will create a significant new revenue source for the company,” said Starbucks (SBUX) CEO Howard Schultz. “Over the course of months there will be a series of verticals that will extend beyond Spotify.” The collaboration will start this fall in the U.S., followed by Canada and the U.K.
Argentina has now barred Citibank (C) Argentina from exiting its role as custodian of some Argentine sovereign bonds while a row with U.S. creditors over unpaid debt rages on. The country has already suspended the bank from capital market operations and stripped its chief executive officer of his authority.
Deutsche Bank is studying whether to move large chunks of its British operations to Germany if the U.K. leaves the EU, underlining the potential fallout in the City of London in the event of a “Brexit”. The German lender, which employs 9,000 people in the U.K., is the first major bank to start formally examining the consequences of a British referendum on EU membership. Meanwhile, Deutsche (DB) has reportedly dismissed its retail banking chief, Rainer Neske.
Taking advantage of the lower borrowing costs in the eurozone, McDonald’s (MCD) and United Technologies (UTX) are now the latest big U.S. companies to issue debt in euros – called “reverse Yankee” bonds – selling €2B and €750M, respectively. Excluding the latest two deals, the total raised by U.S. companies issuing euro-denominated debt so far this year is just over €34B, more than double the previous record of €17B in 2007.
After close to a decade of research, Apple (AAPL) “quietly shelved plans” to launch a TV set more than a year ago. Apple reportedly planned to make a 4K (Ultra HD) set, and considered including sensor-equipped cameras for making video calls. But it ultimately decided the TV’s features wouldn’t be “compelling enough” to enter a highly competitive market. Earlier yesterday, Carl Icahn hiked his price target on Apple to $240, from a $216 target set in February.