Market Snapshot for Wednesday, March 4, 2015
Asia: Japan -0.6% to 18704. Hong Kong -1% to 24465. China +0.5% to 3279. India -0.7% to 29381.
Europe: London -0.3%. Paris flat. Frankfurt -0.3%.
Futures: Dow -0.4%. S&P -0.4%. Nasdaq -0.3%. Crude +0.5% to $50.79. Gold flat at $1203.90.
Ten-year Treasury Yield +3 bps to 2.12%
8:15 ADP Employment Report
10:00 ISM Non-Manufacturing Index
10:30 EIA Petroleum Inventories
2:00 PM Fed’s Beige Book
Key earnings before the open
AEO, AMED, ANF, ARQL, ATHM, BF.B, DSX, GTXI, HYH, INXN, LXRX, MTLS, PETM, SCMP, SOL, SSP, TOUR, TSL, W
Key earnings after the close
ALIM, ALSK, BIOL, BREW, CPE, DAR, ERJ, GEF, GTY, HRB, JONE, PEIX, POWR, PPO, PQ, RNDY, SMTC, SPOK, SQNM, VSLR, WTI
The Reserve Bank of India surprised markets on overnight by cutting rates for the second time this year, citing easing inflation and weakness in parts of the economy. The move sent India’s Sensex to an all-time high of 30,024.74, breaking the key 30,000-level for the first time.
Australia’s economy grew at a slower pace than expected in Q4 as the mining investment boom continued to fade and businesses reined in spending amid low confidence.
Activity in China’s services sector grew modestly in February, with HSBC’s Services PMI rising to 52.0 from 51.8 in January, while a sub-index showed new orders rising at their quickest pace in three months.
U.S. stock futures pointed to another day in the red ahead of Wednesday’s ADP jobs report, which could be watched more closely than usual given the possibility of a June Federal Reserve interest- rate hike. The Nasdaq also appears set to slip further below the psychologically important 5,000 level reached on Monday. The weakness follows yesterday’s weakness, when disappointing monthly car sales dampened investors’ sentiment.
Of note: The big number today will be the ADP employment report. Economists forecast 220,000 jobs to have been created in February, and the reading will give an indication of the strength of the labor market ahead of Friday’s jobs report, a monthly highlight that will also be eyed for clues to whether the Fed is likely to pull the trigger on a rate increase in June.
The dollar strengthened ahead of the report, with the ICE dollar index jumping to its highest level in more than 11 years.
European shares give back early gains this morning following a weaker than expected PMI, a closely-watched survey of the region’s services and manufacturing sectors.
Abercrombie & Fitch (ANF) reports fourth-quarter sales below expectations.
Actavis (ACT) sold the second-biggest corporate-bond offering in history yesterday, with a $21B deal driven by low rates. The giant sale comes as companies this year sell debt at the fastest pace on record, extending a multi-year boom that has financed a flurry of deal making and stock buybacks. Actavis plans to use the money for its $66B acquisition of Botox maker Allergan (AGN). Separately, Warren Buffett says Berkshire Hathaway plans a debut euro-bond sale, joining the craze for European bonds amid record low borrowing costs.
Alibaba (BABA) invests 2.4B yuan ($382.67M) in TV program producer Beijing Enlight Media. The move follows investments worth more than $3.1B in the entertainment industry last year, including stakes in online video streaming sites, internet TV hardware, film production and video games.
Bob Evans Farms (BOBE) takes a hit this morning after reporting earnings below expectations and saying it would not pursue a sale or spinoff of BEF Foods. Janney downgraded the company to neutral from buy.
Novogen soars after the Australian biotech said studies show one of its drugs can kill brain-cancer cells.
Honeywell International (HON) reaffirmed its earnings outlook for the first quarter and full year.
Royal Bank of Scotland (RBS) plans to cut as many as four out of five jobs in its investment banking units by 2019, while overhauling its back-office systems to automate them. A large proportion of the layoffs will occur across the U.S. and Asia.
Just two months after stating cumulative PlayStation 4 sales topped $18.5M, Sony (SNE) says they were above $20.2M as of March 1. Microsoft’s (MSFT) Xbox One sales were only at $10M as of last November, though holiday season demand appears to have been strong.
Smith & Wesson (SWHC) beats estimates on both the top and bottom lines and increases its full-year earnings guidance to between $0.87-$0.89 on net sales of $532M-$536M, from its previous estimate of $0.74-$0.78 on sales of $526M-$530M.
Southwest Airlines (LUV) is in the spotlight this morning after projecting higher fuel costs for the first quarter.
Target (TGT) is planning to eliminate several thousand positions, mainly from headquarters locations, as part of a restructuring that will cut $2B in costs over two years.