Market Snapshot
Asia: Japan +0.6% to 19544. Hong Kong +0.9% to 24120. China +2.1% to 3577. India -0.4% to 28622.
Europe: London +0.6%. Paris -0.4%. Frankfurt -1%.
Futures: Dow -0.1%. S&P flat. Nasdaq flat. Crude -2.2% to $44.20. Gold -0.1% to $1146.60.
Ten-year Treasury Yield -4 bps to 2.06%
Economic News
7:00 Mortgage Applications
10:30 Petroleum Inventories
2:00 FOMC Announcement
2:00 Yellen Press Conference
Key earnings before the open
ATU, EJ, EVLV, FDX, GIS, LEJU
Key earnings after the close
CLC, CTAS, GES, GOMO, JBL, JUNO, MLHR, RENN, SCVL, SLW, TLYS, WSM
Markets
U.S. stock futures move lower ahead the open as investors grow nervous about whether the central bank will strike the right balance in setting the tone for its first rate hike in nearly a decade. After trading flat throughout Europe’s morning session, futures for the Dow Jones Industrial Average fell 93 points to 17,684, while those for the S&P 500 index dropped about 10 points to 2,057. Futures for the Nasdaq-100 backed off 16 points to 4,355.7. The lynchpin of today’s trading rests on whether the Fed has taken a further step toward raising interest rates by taking out the word “patient” from its current policy statement.
Oil extended losses to a seventh day, with crude futures down 2.2% at $44.20, ahead of weekly data and the Federal Reserve’s monetary policy decision. U.S. crude stocks are forecast to have surged for the tenth straight week to a new record high, fueling new supply concerns of a global oil glut.
Japanese shares rose today after data showed exports rising at a faster-than-expected pace in February. The Nikkei closed up 0.6% at 19,544 as Japanese exports grew for the sixth straight month, helped by a weaker exchange rate and strength in the U.S. economy.
Prime Minister Benjamin Netanyahu’s Likud party unexpectedly pulled ahead of his main rival in Israel’s election, putting him in a leading position to form a governing coalition. Citing unofficial results with 99% of the vote counted, Israeli media reported that Netanyahu captured 29 seats in the 120-member Knesset, five more than Isaac Herzog’s Zionist Union.
Greece frustrated its main creditors yesterday by refusing to update euro zone peers on its reform progress at a scheduled teleconference, insisting that the discussions should be escalated to tomorrow’s EU summit. Athens is likely to run out of cash by the end of the month and may then default on its debt, potentially forcing itself out of the euro zone.
Stocks
Adobe (ADBE) looks weak this morning after projecting weaker guidance for next quarter compared to analyst estimates. It anticipates an EPS of $0.41-$0.47 on revenue of $1.125B-$1.175B in FQ2, below a consensus of $0.48 on $1.18B.
American Express (AXP) is teaming up with big-name companies such as Macy’s (M), Exxon Mobil (XOM), AT&T (T) and Rite Aid (RAD) to launch a loyalty program, called Plenti, which will operate similar to drugstore-rewards programs.
The DOJ is considering revoking years-old settlements and prosecuting banks for manipulating interest rates should they be found to have committed currency-rigging after deals were negotiated. “Where banks fail to live up to their commitments, we will hold them accountable,” said the DOJ’s Leslie Caldwell. Affected institutions include Barclays (BCS), Royal Bank of Scotland (RBS), UBS (UBS) and HSBC (HSBC).
Facebook (FB) is updating its PC and mobile Messenger apps to allow users to send cash to each other. Once users link a Visa (V) or MasterCard (MA) debit card to their Messenger account, they will be able to send their friends money for free by tapping a dollar sign in the chat box.
Due to shrinking reserves and possible further losses in their derivative portfolios, Fannie Mae (FNMA) and Freddie Mac (FMCC) may require more bailouts from U.S. taxpayers, said the FHFA’s Inspector General in a report today. The possibility of another taxpayer draw raises pressure on Congress to overhaul housing finance laws, although new legislation is not expected anytime soon.
A California federal judge has thrown out a shareholder class-action suit accusing Herbalife (HLF) of running a pyramid scheme, arguing there was no evidence the company had made disclosures to investors that caused its shares to fall.
Kraft (KRFT) is recalling 242,000 Macaroni & Cheese Dinner cases due to “the possibility that some boxes may contain small pieces of metal.” The food giant received eight consumer complaints about the product, although no injuries have yet been reported.
Lumber Liquidators has sent free “idiot-proof” formaldehyde test kits following the damaging 60 Minutes report that accused the company of selling contaminated laminate flooring from China. Environmental Diagnostics Laboratory, which manufactures and analyzes the kits, estimates it sent out 3,000-5,000 sets so far.
Microsoft (MSFT ) has confirmed that it will not use the Internet Explorer name for the main browser it plans to ship with Windows 10. The revised software, codenamed Project Spartan, is intended to catapult Microsoft beyond the Web 1.0 world for which IE was designed. Although being pushed into retirement, the Internet Explorer name will live on, and will be included in the next Windows launch for enterprise compatibility.
Oracle (ORCL) reported flat third-quarter revenue and slightly lower profit as the U.S. dollar strengthened, but raised its quarterly dividend 25% and provided satisfactory forex-adjusted FQ4 guidance. Net income, however, fell 2.7% Y/Y to $2.5B.
Toyota (TM) says it will raise its monthly base worker salary by ¥4,000, its biggest hike in over a decade. Higher wages are considered key for sustaining growth and ending deflation in Japan, and Prime Minister Shinzo Abe has called on companies to do their part and lift worker pay.