Market Snapshot
Asia: Japan closed. Hong Kong -0.2% to 28400. China flat at 4477. India -0.6% to 27226.
Europe: London -0.1%. Paris -0.1%. Frankfurt -0.2%.
Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.2%. Crude -0.6% to $56.71. Gold -0.7% to $1205.60.
Ten-year Treasury Yield +5 bps to 1.97
Economic News
7:00 MBA Mortgage Applications
8:30 GDP Q1
10:00 Pending Home Sales
10:30 Petroleum Inventories
2:00 PM FOMC Announcement
Key earnings before the open
ABB, ACCO, ADT, AME, AMED, ANTM, AVY, BC, BEN, BGCP, BOKF, CBG, CCJ, CFR, CRI, CVE, DHX, DX, DXYN, EDR, ETN, EVER, EXC, FCAU, FCH, FDML, FI, FUN, GD, GEL, GIB, GRMN, GRUB, GT, HCBK, HERO, HES, HLT, HOT, HUM, ICON, IDCC, IP, ISSI, LFUS, LINE, LL, LVLT, MA, MDLZ, MTOR, MWV, NEE, NOC, NSC, NYCB, OCR, PCG, PX, Q, RES, ROL, SAIA, SAVE, SLAB, SLGN, SNCR, SO, SPIL, SPR, SPW, TRI, TWX, UMC, VRX, WEX, WM, WOOF
Key earnings after the close
AEL, AFFX, AR, ARII, ARRS, ASGN, ASH, ATRC, ATW, AVG, AXS, BIDU, BLKB, BVN, CACI, CAVM, CBT, CHMT, CMO, CMPR, CNO, CNW, COHR, CRL, CSGP, CSII, CW, CWT, DOX, DRE, DXCM, DYAX, ECOL, ELGX, EQIX, EQY, ES, ESV, EXL, EXR, FLEX, FOE, FORM, FORR, GLUU, HOLX, HOS, HY, IPCM, ISIL, KAMN, KEG, KEX, KRA, LNC, LOCK, LOPE, LXRX, MAA, MAC, MANT, MAR, MDAS, MEOH, MEP, MMLP, MTGE, MTW, MUR, NE, NSR, NXPI, O, OGS, OIS, PDM, PPC, PRXL, PTC, QEP, QUIK, RKT, ROG, RRTS, SAM, SCI, SFLY, SGI, SPOK, SPRT, SSS, STAA, STR, SU, TAL, TCO, TEX, TILE, TTEK, TTMI, TX, UNM, VAR, VRTX, WLL, WMB, WMGI, WTS, XL, YELP
Markets
U.S. stock futures move lower this mornign, after the Q1 GDP report showed that the economy grew at a slower pace than expected during the first quarter. The U.S. economy grew at a meager 0.2% annualized pace in the first quarter, a period marked by severe weather, a major port dispute and a soaring dollar that curbed American exports. A Federal Reserve statement after the conclusion of its two-day policy meeting today also looms. Yesterday, the markets ended a choppy session slightly higher, as investors grappled with disappointing earnings, weaker-than-expected consumer-confidence data and uncertainty over the Fed statement. Investors will again be looking for subtle clues today for the timing of a future interest rate. The chance of a hike in June is still on the table, although the likelihood of one has steadily decreased amid a drum-beat of soft Q1 economic data.
Stocks fell in Europe, following Asia lower, while the dollar held near two-month lows before the much-anticipated policy decison. “While steady language by the FOMC may not by itself change the mind of the rates market, we believe incoming data will, prompting a front-end sell-off in Treasuries and a rebound in the USD,” BNP Paribas said. The bank expects Q1 weakness to be downplayed in today’s announcement.
After months of urging allies not to join the AIIB as founding members, the Obama administration now says the new bank could be a good development, but cautioned against its lack of transparency. Despite China receiving 47 member applications, the U.S. and Japan remain the only two major economies that have not asked to join the bank.
Greece is expected to present draft reform legislation to lenders today, government officials said, in a bid to show it is serious about securing its much-needed aid prior to a €1B loan repayment to the IMF next month. Although the bill is not expected to offer major new concessions, it will include details on measures to tackle corruption, evasion and tax and public administration reforms.
U.S. first-quarter earnings are on track to post a slight gain following many stronger-than-expected results. With reports in from 47% of S&P 500 companies as of Tuesday, Q1 earnings are now expected to have risen 0.02% from a year ago, beating a Thomson Reuters forecast for a 2.9% decline. Still, the raised outlook has been mainly attributed to one company – Apple (AAPL). Without the tech giant, the S&P 500 forecast would show a profit decline of 1.6%.
“Corporate activity in early 2015 supports our view that the S&P 500 will return more than $1T of cash to investors this year,” Goldman Sachs said, forecasting an 18% jump in buybacks and 7% climb in dividends for the year. Next week more than 80% of S&P 500 companies will exit a blackout period for repurchases, which could fuel an extended rally, or at least continue to keep a floor under equities.
Stocks
Barclays (BCS) has set aside another £800M ($1.2B) to cover a potential settlement for alleged foreign exchange manipulation, bringing its total provision for resolving the scandal to £2.05B. Barclaysalso reported a first-quarter statutory pretax profit of £1.3B (-26% Y/Y), and underlying pretax profit (which strips out the provision) of £1.85B (+9% Y/Y).
GoPro (GPRO) jumps in the premarket after beating both profit and revenue estimates on strong demand for its flagship Hero4 action cameras and giving a strong Q2 forecast. Net profit increased 52% to $16.6M, while revenue jumped up 54% to $363.1M. GoPro also announced its intentions to focus its international expansion on Japan, Korea and China.
Intel (INTC) is reorganizing its operations responsible for helping move the company into new products, establishing what it calls the new technology group, which will combine a number of R&D efforts into a single organization. The change will shift around a number of key Intel executives, including Mike Bell, who formerly carried out those operations in the company’s new devices group and led the chip maker’s push into wearable devices.
Reporting its sixth consecutive quarterly decline, Samsung’s (SSNLF) net profit slumped 39% to 4.63T Korean won ($4.3B) during the January-March period, as cut-throat competition hit its mobile division. Mobile operating profit margins, however, saw a rise, climbing to 10.6% from 7.5% last quarter due to lower marketing costs and better sales of midrange handsets. Despite the lousy results, Samsung said it expected an earnings improvement in Q2, citing the recent launch of the new Galaxy S6.
Stratasys (SSYS) has issued a warning of lower-than-expected first-quarter results, citing reduced spending in North America and the stronger dollar. “Our industry still remains in the early phases of adoption, and our belief in the long-term opportunity remains unchanged,” said Chief Executive David Reis. Stratasys now expects Q1 revenue of $171M-$173M and EPS of $0.02-$0.04, well below a consensus of $198.8M and $0.29. SSYS -16.6% premarket.
It looks like Dick Costolo’s credibility is again on the line after Twitter (TWTR) missed first-quarter revenue estimates and cut its 2015 sales forecast. While this isn’t the first time the company has fallen short on promised results, investors keep being told that new features and services are starting to pay off. Meanwhile, the company’s user growth slowed to 18% Y/Y from 21% in the fourth quarter. Twitter saw its shares fall over 18% before the market closed yesterday.
Wal-Mart (WMT) is planning to increase its investment in China, aiming to open 115 stores before 2017 and upgrade more than 50 this year. Wal-Mart has a mixed history in the country with the preference of consumers for local tastes making national distribution a challenge.