Market Snapshot
Asia: Japan -1% to 19286. Hong Kong flat at 24486. China +0.3% to 3692. India +0.1% to 27459.
Europe: London -0.4%. Paris +0.3%. Frankfurt +0.2%.
Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude -1.7% to $50.57. Gold -0.6% to $1197.30.
Ten-year Treasury Yield +9 bps to 2.01%
Economic News
8:30 GDP
9:55 UofM Consumer Sentiment
3:45 PM Janet Yellen speech
Key earnings before the open
BBRY, CCL, FINL
Markets
U.S. stock futures head to another weak opening todaty, putting stocks in line to finish the week with hefty losses. Reaction to a weaker-than-expected GDP revision was muted, as investors waited to see whether Janet Yellen will shed light in a speech today on the timing of a Federal Reserve interest-rate hike. After a week of volatile moves in bonds, stocks and currencies, Yellen will discuss her own view on how Fed policy should evolve from here.
Lower oil prices and subdued consumer demand have again pushed Japan to the brink of deflation, underscoring the difficulties faced by policy makers to revive the world’s third-largest economy through its ¥80T a year stimulus program. Japanese core consumer price inflation, which includes energy prices but excludes food, fell to zero Y/Y in February, far below the 2% target the central bank had aimed to achieve by this spring. The Nikkei closed down 1% on the news, falling to 19,286.
Saudi Arabian-led strikes on Yemen and a potential nuclear deal with Iran would have little near-term impact on oil supplies, Goldman Sachs said in an overnight note to clients. “We expect both events to have negligible near-term supply impacts, with the build in crude inventories set to continue in 2Q15. Longer term, a deal with Iran could lead to greater OPEC supplies although the timing of the sanction relief remains uncertain,” the firm stated.
The Senate early Friday passed a Republican budget plan that would cut domestic spending by $5.1T over 10 years. The non-binding budget, debated all week and passed 52-46 during a 15-hour marathon session before the Easter recess, gives Republicans another crack at repealing the Affordable Care Act, increases defense spending and slashes funds in other areas, including education and health care. The House passed a similar spending plan on Wednesday.
Stocks
Airlines rushed to change their rules yesterday to require a second crew member in the cockpit at all times, just hours after French prosecutors suggested Germanwings (DLAKY) co-pilot Andreas Lubitz locked the captain out of the cockpit on flight 4U9525 and crashed the plane on purpose. The U.S. has required two crew members to be in the cockpit at all times since the Sept. 11 attacks, but the procedure is not standard in Europe or Canada.
Amazon (AMZN) is in talks to buy online luxury retailer Net-a-Porter in what could be the biggest acquisition yet for the e-commerce giant.
Just a day after the SEC disclosed an investigation into the firing of Dov Charney, the former American Apparel (APP) CEO is now claiming $40M in damages stemming from the termination. The company’s board ousted Charney in December, six months after suspending him, for allegedly misusing funds and spreading improper photos of a former employee. Charney’s claims include almost $6M in severance, $1.3M in vacation-time pay, $10M for emotional distress and 13M shares of the company.
BlackBerry (BBRY) rose 5% after reporting fourth-quarter earnings of 4 cents a share, beating forecasts of a four-cent loss.
GameStop (GME) is set to trade lower after reporting a larger-than-expected revenue drop in the holiday quarter and disappointing guidance. The company’s biggest source of revenue has been sales of preowned games and hardware, however, with gamers switching to newer consoles and mobile games, those sales have been under pressure. Q1 guidance: EPS of $0.53-$0.60 vs. $0.66 consensus; FY15 guidance: EPS of $3.60-$3.80 vs. $4.04 consensus.
Orexigen Therapeutics (OREX) surged 10% ahead of the market open after the biotech firm received a green light from European regulators for its Mysimba diet drug.
Restoration Hardware Holdings (RH) said fourth-quarter earnings rose 60% on a year-over-year basis.
Swiss private bank Union Bancaire Privee has agreed to buy Royal Bank of Scotland’s (RBS) international private banking arm Coutts International. While both parties did not disclose a price, the FT suggested on Thursday that the deal would fetch $600M-$800M.
Two weeks after Twitter (TWTR) confirmed the acquisition of Periscope, the live streaming service has launched an iOS app, with an Android app is soon to come.
Making activist Starboard Value happy, Yahoo (YHOO) has added $2B to its buyback authorization, raising its total available funds to $2.73B. The new buyback funds are good until March 31, 2018. Yahoo used part of its Alibaba (BABA) IPO windfall to buy back $980M worth of shares in Q4, and has spent $9.7B on buybacks since Q2 2012.