Asia: Japan closed. Hong Kong -1.3% to 27756. China -4.1% to 4298. India -0.2% to 27440.
Europe: London +0.4%. Paris +0.1%. Frankfurt +0.1%.
Futures: Dow flat. S&P -0.1%. Nasdaq -0.1%. Crude +0.9% to $59.46. Gold flat at $1186.60.
Ten-year Treasury Yield +2 bps to 2.13%
8:55 Chain Store Sales
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
Key earnings before the open
ABMD, ACTA, AFSI, ALLT, AMAG, ANIP, BBEP, BBW, BLMN, BPI, CIE, CLDT, CRTO, CVLT, CYNO, DIS, DISCA, DTV, EIGI, EL, EMR, ENR, EXH, EXLP, GCAP, GLDD, GLT, GTN, GVA, H, HCA, HCP, HEP, HRC, HRS, HW, ICE, ISIS, K, KEM, KLIC, KMT, LPX, MDC, MDCO, MMP, MNK, MSO, NBL, NGLS, NNN, NTI, NWN, ODP, OZM, PRIM, SABR, SALE, SBH, SCOR, SGNT, SMG, SNSS, SPAR, SRE, SSE, STWD, TDG, TECH, TGH, TRW, TW, UAM, USAK, VLP, VMC, VSH, WEC, WNR, YORW, ZTS
Key earnings after the close
ACLS, AGU, AIZ, ALL, AMRS, AMSG, ANAD, ANDE, ARC, ATSG, AWR, AXLL, BIO, BRDR, CENT, CERS, CLUB, COUP, CRAY, CSU, CTL, CVG, CYH, DK, DKL, DLR, DTLK, DVN, EA, ENPH, EXAM, FISV, FOSL, FTR, GCA, GHDX, GMED, GNMK, GPOR, GRPN, HK, HLF, HRZN, IAG, ICUI, IGTE, IRWD, JIVE, KAR, KGC, KONA, LC, MHLD, MM, MYGN, MYL, NDLS, NFX, NVGS, NYMT, OCLR, OKE, OKS, OUT, PAA, PACB, PAGP, PBPB, PKD, PXD, PZZA, QGEN, QNST, QUAD, REGI, REXX, RLOC, RNR, RP, RUBI, SBRA, SCTY, SKUL, SLF, SM, SPA, SUPN, TEG, TMH, TNET, TRNX, TSRA, TTGT, USNA, VVUS, WAGE, WES, WGP, WR, WSR, WSTC, WTR, WTW, XXIA, Y, ZAGG, ZEN, ZLTQ, ZU
U.S. stocks are pointing to a lower open today, as the trade-deficit report showed that the U.S.’s trade gap hit its highest level in nearly 20 years as the West Coast port dispute ended. Investors also are awaiting service-sector reports due later this morning, as well as the closely followed jobs report slated for Friday.
Asian stock markets retreated after Australia’s central bank cut interest rates for the second time in four months, lowering its cash-rate target to a record low 2.0% from 2.25%. Although the economy is showing signs of improvement, the new move will reinforce economic growth in the face of falling commodity prices and a China slowdown.
Indonesia’s economy unexpectedly shrank for a second straight quarter as exports and government spending dropped, dealing a setback to President Joko Widodo as he seeks to bolster Southeast Asia’s largest economy. Coming in below forecasts for 4.9% growth, GDP grew 4.7% from the year-ago period in Q1 and lower than the 5% expansion seen in Q4.
The European Commission raised its euro-area growth forecast today as dwindling fears of deflation and monetary stimulus help the economy overcome pressure from the continuing crisis in Greece. While GDP in the 19-nation bloc is now forecast to increase 1.5% this year, up from a prediction of 1.3% in February, the EC slashed Greece’s economic growth outlook to 0.5% in 2015, down from an earlier 2.5% estimate. Other GDP forecasts for 2015: Germany +1.9%; France +1.1%; Italy +0.6%.
Greece is willing to finalize a €1.2B deal with German operator Fraport to run regional airports and reopen bidding for a majority stake in Piraeus port. The plan appears to be the latest concessions offered by Athens in an effort to secure aid from international lenders. Austrian Finance Minister Hans Joerg Schelling said this morning that Greece’s debt talks with creditors were making progress but have not yet made a breakthrough.
Chicago Fed boss Charles Evans is sticking with the Fed line of Q1’s economic weakness being transitory, but is also keeping to his previously-held view that the risks from hiking rates too soon are greater than those of delaying any move until 2016. His remarks are the first by a Fed official since last week’s minutes which showed the committee brushing off the weak Q1 and making no mention (at least in the policy statement) of the strong dollar.
Cisco (CSCO) is set to launch a converged cable access platform, enabling cable operators to offer download speeds of one gigabit a second or more. The new cBR-8 system, which will be unveiled today, will enable cable operators to achieve savings that could exceed 40% of capital and operating expenses over five years, the networking-equipment maker said in a statement. Yesterday, Cisco (NASDAQ:CSCO) named company veteran Chuck Robbins as its new CEO. Robbins will replace John Chambers on July 26.
With heavy gains from its wealth management business, UBS (UBS) reported first-quarter profit that nearly doubled from the same period last year, despite the SNB’s shock decision to unpeg its currency from the euro. Net profit came in at 1.98B Swiss francs ($2.12B), up from 1.05B francs from the year-ago period, beating analysts’ forecasts. The bank’s adjusted return on tangible equity stood at 14.4% during the quarter.
Despite the recent scandals that have plagued the bank, HSBC’s (HSBC) first-quarter profit beat analysts’ estimates, benefiting from an increase in securities revenue and lower bad loans. Pretax profit rose to $7.1B vs. $6.8B a year earlier. The bank also said it would make the decision whether to move its headquarters out of the U.K. within months rather than years.
Fed Chair Janet Yellen has confirmed that the Justice Department is investigating Medley Global Advisors over a possible leak of information from the Fed in 2012 and that she was one of the Fed staffers in contact with the firm during that period.
Preparing the ground for its next flagship North American buyout fund, KKR (KKR) is merging some of its private equity industry teams in the U.S. after several more of its leaders stepped down. KKR will combine its technology group with its media and communications team and merge its retail team with its consumer group.
Having lost the title of world’s largest mutual fund some time ago, Pimco’s (AZSEY) Total Return Fund (PTTAX) is now 2nd in fixed-income to Vanguard’s Total Bond Market Index Fund. In April, another $5.6B was pulled from the Pimco fund, which now has assets of $110.4B vs. Vanguard’s $117.3B. Pimco’s Total Return has also seen outflows of over $110B since Bill Gross exited in late September. At its peak in April 2013, the fund had $293B.
Greenlight Capital’s David Einhorn laid out his case against oil frackers at the Ira Sohn conference yesterday, arguing that these kind of companies just drill “lots and lots of holes” and burn through cash. Einhorn called for shorting Pioneer Natural Resources (PXD), saying the company loses $0.20 of present value for every $1 invested. Fracking companies offer an “almost infinite supply of negative return investment opportunities,” he added. Other shorts that Einhorn mentioned include: WLL, CXO, CLR, EOG.
Global annual spending on cancer drugs in 2014 hit $100B for the first time, largely due to rising drug prices and increased incidence of cancer. “Earlier diagnosis, longer treatment duration and increased effectiveness of drug therapies are contributing to rising levels of spending on medicines for cancer,” the IMS said in a report. The figures raise even more questions of affordability as the pharmaceuticals industry prepares to launch a fresh generation of treatments that promise to push costs even higher.
Jumping on the latest health bandwagon, Panera Bread (PNRA) announced it will remove at least 150 artificial sweeteners, colors, flavors and preservatives from its menu by the end of next year. The decision marks the latest move by a major food company to respond to a consumer shift toward foods seen as simpler and more healthful. Chipotle (CMG) declared last week it had mostly removed GMO ingredients from its supply chain, while Nestle (NSRGY) said in February it would remove artificial flavors and colors from its candy bars.