Market Snapshot
Asia: Japan -0.3% to 20473. Hong Kong +0.7% to 27657. China flat at 4910. India -1.3% to 26837.
Europe: London +0.1%. Paris +0.4%. Frankfurt +0.6%.
Futures: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude -2.2% to $59.94. Gold +0.2% to $1188.70.
Ten-year Treasury Yield flat at 2.27%
Economic News
7:00 Mortgage Applications
8:15 ADP Jobs Report
8:30 International Trade
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
10:30 Petroleum Inventories
2:00 PM Fed’s Beige Book
Key earnings before the open
BF.B, VRA
Key earnings after the close
FIVE, LF, VRNT
Markets
U.S. stock futures rose Wednesday as investors focused on upbeat news out of Europe . In European markets, stocks were higher after the European Central Bank left its main interest rates unchanged at record low levels. Upbeat news around Greece’s ability to pay its international creditors later this week also lingered in the market.
The OECD has cut its growth outlook again, reducing its global forecast due to lagging investment and risks, including a possible Greek default. The OECD now expects the world economy to expand 3.1% in 2015, down from 3.7% predicted in October. Last year, the world economy grew 3.3%.
Greek Prime Minister Alexis Tsipras will come under intense pressure for a debt deal today as Friday’s deadline for a €300M repayment to the IMF goes down to the wire. Yesterday, the country’s international creditors reportedly drafted the broad lines of an agreement that amounts to a take-it-or-leave-it offer, following months of fruitless dialogue with the Athens government. Tsipras will travel to Brussels later in the day to meet with European Commission President Jean-Claude Juncker.
Australia’s economy expanded 2.3% in the first quarter from the year-ago period, beating forecasts and pushing up the Australian dollar. The internals of the report were less convincing, as the quarterly increase was seen driven by a jump in inventories and growth in export volumes. Final consumption expenditure, the biggest contributor to Australian economic growth, added just 0.4% to quarterly growth.
According to Ben Bernanke, Beijing was pushed into launching the Asian Infrastructure Investment Bank by U.S. lawmakers’ refusal to give China greater clout in existing multilateral institutions. America’s legislature blocked a 2010 IMF agreement to shift 6% of quota – and voting rights – to emerging economies, which would have “better reflected the increasing role of China” and other nations, the former Fed Chairman said. “So I understand why other countries say, ‘well let’s take our marbles and go home’.”
Stocks
Under a new program called Fulfillment by Amazon Small and Light, the e-commerce giant will provide free shipping for many popular items weighing 8 ounces or less, including ones whose prices fall well short of Amazon’s (AMZN) $35 free shipping minimum. Items covered by the program will arrive in 4-8 business days. To a large extent, the move takes aim at eBay (EBAY), which does considerable business handling sales of small/low-cost goods that come with free shipping.
At the company’s annual Discover conference yesterday, Hewlett-Packard (HPQ) co-chief executive Meg Whitman said the separation of HP and Hewlett-Packard Enterprise would be effective November 1. Last October, HP announced it would split into two listed companies, separating its printer unit from its hardware and services operations. HP has also used the event to announce a partnership with fast-growing data center switch vendor Arista (ANET).
Lawyers for Monsanto and Syngenta are quietly working together to discuss regulatory hurdles that would arise from the potential combination of the two companies, Bloomberg reports. Syngenta (SYT) may consider entering formal negotiations if Monsanto (MON) sufficiently raised its offer and provided a multi-billion dollar termination fee (perhaps about 10% of the purchase price at the current bid) to compensate for the risks of completing a deal.
Looking to expand its user base and rev up its revenue engine, Pinterest is planning to launch “buyable pins,” enabling users to buy items they see directly via Pinterest. Although Pinterest won’t take a cut of each transaction, merchants will have the option to pay for “promoted pins” – giving the company an important revenue source following its $11B valuation. Instagram (FB) has also announced a similar feature, permitting advertisers to add a button to encourage viewers to click through to their website.
Synchronoss gains in the premarket following a report stating the company is exploring a sale that could be valued at over $2B. Sources state Synchronoss (SNCR) is working with investment bank Qatalyst Partners on the deal, and has already “drawn interest from a number of private-equity firms.”
Raising additional legal concerns, Teva Pharmaceutical (TEVA) is reportedly looking to purchase more shares in Mylan (MYL). Teva last week disclosed a 1.8% stake in Mylan, which blasted the move as breaching U.S. antitrust laws as companies that acquire stakes worth more than $76.3M in rivals must first obtain regulatory approval. The strategy is a sign of Teva’s commitment to acquire Mylan as the latter presses on with its own $34B hostile bid for Perrigo (PRGO).
Takata will “rapidly” reduce its use of ammonium nitrate as an air bag propellant after it appeared “to be one of the factors” contributing to inflator ruptures, Takata (TKTDY) executive Kevin Kennedy told a congressional subcommittee on Tuesday. However, Representative Michael Burgess, the Texas Republican who chaired the hearing, said he “couldn’t believe” what he was being told. “They are still making an air bag with ammonium nitrate as a propellant without a desiccant and they’re putting that in replacement and new vehicles,” Burgess said. “It almost seems like there should be a warning label stamped on the car.”
Toyota and Ford may join forces to maintain control of their vehicle dashboards as Apple (AAPL) and Google (GOOG, GOOGL) introduce technology targeting the car industry. Toyota (TM) is now exploring collaboration for the implementation of Ford’s (F) SmartDeviceLink technology, an open source platform that integrates smartphones apps with cars, in future Toyota and Lexus vehicles.