Good morning. Happy Thursday.
The Asian/Pacific markets closed mixed. Japan, New Zealand, Australia and the Philippines did well. China and Hong Kong were very weak; Indonesia and India also posted losses. Europe, Africa and the Middle East are currently mostly down. Israel and Sweden are doing well, but the UK, Poland, Turkey, Norway, Hungary and Belgium are down. Futures in the States point towards a positive open for the cash market.
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The dollar is up. Oil is up; copper is down. Gold and silver are flat. Bonds are down.
Stories/News from Seeking Alpha…
U.S. stock futures are flat as investors head into another powerhouse day of earnings reports, including updates from Amazon (NASDAQ:AMZN), Intel (NASDAQ:INTC), Starbucks (NASDAQ:SBUX), Ford (NYSE:F), Comcast (NASDAQ:CMCSA), UPS (NYSE:UPS), AbbVie (NYSE:ABBV) and Altria (NYSE:MO). Across the globe, concerns over Beijing pulling back on stimulus measures sent the Shanghai Composite Index down 2.4% to a three-week low, while Hong Kong’s Hang Seng Index fell 0.8%. Japan’s Nikkei closed with 0.5% gain ahead of escalating Japan-U.S. trade talks. In Europe, the Stoxx Europe 600 Index is down 0.2%.
Bank of Japan leaves policy unchanged, updates guidance
The Bank of Japan left policy unchanged, as most economists expected, maintaining its policy balance rate at -0.1% and guiding to keep extremely low interest rates until at least spring 2020. That’s putting a date to policy guidance it had previously just said it would keep for an “extended period.” The BOJ’s target for the 10-year government bond yield is zero, and for the first time the bank projected economic growth for the year ending March 2022 (it expects 1.2% growth then). It sees core CPI rising at 1.6% in fiscal 2021; time’s running out for Gov. Haruhiko Kuroda to hit a 2% inflation rate before his term expires in 2023.
Huge German bank merger stalls
Merger talks between Deutsche Bank (NYSE:DB) and German rival Commerzbank (OTCPK:CRZBF) have collapsed, according to CNBC. A source indicates that the general feeling is a merger is not a great idea, since Commerzbank doesn’t have the same amount of credibility on the Street as Deutsche Bank does with clients. Analysts have been questioning the level of synergies between the two banks. Shares of Deutsche Bank are up 2.12% in premarket action.
Tech giants impress
Strong earnings reports from Microsoft (NASDAQ:MSFT) and Facebook (NASDAQ:FB) have set up the tech sector for a strong day. “With Facebook, investors had concerns about pressure from U.S. and EU regulators, which hasn’t come to pass, and privacy concerns haven’t slowed growth especially in emerging markets,” stated Pacific Life Fund Advisors’ Max Gokhman. “With Microsoft, Azure has really been supporting them. The broader takeaway for tech is that so long as business and consumer sentiment holds up there’ll be continual growth for them,” he noted. Microsoft is up 3.59% in premarket trading and is flirting with the $1T market cap mark, while Facebook is 7.05% higher. The Invesco QQQ ETF (NASDAQ:QQQ) is up 0.75% in the early session.
Oil trickles higher again
Oil prices are up slightly again after finishing yesterday not far from six-month highs when traders digested data showing U.S. crude stockpiles surged to their highest levels since October 2017. The supply read alleviated some fears of tight supply due to the OPEC output cuts and recent U.S. sanctions on Venezuela and Iran. “We still expect oil prices to fall this year as sluggish global growth weighs on oil demand, U.S. shale output grows strongly and investor aversion to risk assets like commodities increases,” forecasts Capital Economics. In today’s early action, WTI crude oil futures +0.4% to $66.15/bbl and Brent crude +0.9% to $75.21/bbl.
Intel streamlines autonomous vehicle project
Intel (INTC) isn’t taking the foot off the gas of its autonomous vehicle project, despite laying off several dozen employees at a Silicon Valley research lab. The cuts were part of an efficiency move as Intel begins centralizing more of its autonomous activities in Mobileye’s home nation of Israel. The Information reported Intel’s Mobileye unit acquired Eonite Perception late last year. Eonite is described as a Palo Alto-based startup specialized in software for 3D mapping and tracking using lidar.
Economists look for durable goods bounce
The U.S. Census Bureau is scheduled to release the March Durable Goods Order report later today. Economists expect a 0.7% gain in durable goods for the month in a turnaround from the 1.6% drop recorded in February. Durable goods are anticipated to be up 0.1% when defense orders are stripped out and 0.2% higher when transportation orders are backed out.
Slack may unveil IPO paperwork this week
Slack (SLACK) plans to make public its prospectus for a direct listing on the stock market as soon as this week, the Wall Street Journal reports. The messaging platform submitted its filing to regulators confidentially in February. The document will show that the company is on track for about $500M in annual revenue this year and that it’s unprofitable because it continues to spend money for growth, said a person familiar with the matter.
SoftBank investing $125M in Alphabet’s Loon for sky-based Internet
A unit in SoftBank’s (OTCPK:SFTBY) domestic telecom is investing $125M in Project Loon, the effort from Alphabet (GOOG, GOOGL) to float networking equipment via balloons to provide Internet access. SoftBank’s HAPSMobile has worked to beam Internet from drones to help underserved areas, and it’s looking to collaborate and perhaps share technology with Google as they face off against rivals trying to bring Internet access from low-earth-orbit satellites.
Japan trade talks kick off
U.S. Treasury Secretary Steven Mnuchin is scheduled to meet with Japanese Finance Minister Taro Aso today to discuss provisions against currency manipulation and other trade issues. Economy Minister Toshimitsu Motegi is also set to meet with U.S. Trade Representative Robert Lighthizer to negotiate trade issues that could impact automobile manufacturers Honda (NYSE:HMC), Toyota (NYSE:TM), Mazda (OTCPK:MZDAY) and Nissan (OTCPK:NSANY). The meetings precede the planned summit between Prime Minister Shinzo Abe and President Donald Trump later in the week.
Marketers look to esports to find younger consumers
Powerful brands such as State Farm, Disney (NYSE:DIS), Spotify (NYSE:SPOT), Toyota (TM), Mastercard (NYSE:MA), Hershey (NYSE:HSY), Sephora (OTCPK:LVMHF, OTCPK:LVMUY), Kellogg’s (NYSE:K) Cheez-It and Wendy’s (NASDAQ:WEN) are all turning to esports as a way to find consumers between 18 and 35 years old that may have already cut the cord to traditional TV. Early data from Nielsen has shown that brands backing esports have seen some benefit, even if they aren’t naturally aligned with the growing form of entertainment. Last year, 39% of brand exposure in esports competitive broadcasts was from non-gaming related companies.
What else is happening…
Tesla (NASDAQ:TSLA) talks insurance, Model Y production and Gigahopes.
Chevron (NYSE:CVX) seen as winning the bidding war for Anadarko Petroleum (NYSE:APC).
Duke Energy (NYSE:DUK) to sell commercial renewable energy stakes to John Hancock.
Comparable sales shine at Chipotle (NYSE:CMG).
Wednesday’s Key Earnings
Facebook (FB) +8.1% PM on Q1 revenue beat.
Microsoft (MSFT) +4% PM on Q4 beat, in-line guidance.
Tesla (TSLA) -0.5% PM after Q1 earnings miss.
Visa (NYSE:V) flat PM after Q1 beat.
PayPal (NASDAQ:PYPL) +0.3% PM after lower-than-expected revenue forecast.
AGNC Investment (NASDAQ:AGNC) -2.1% PM on Q1 results, reducing dividend.
Chipotle Mexican Grill (CMG) +1% AH on strong comparable sales growth.
Lam Research (NASDAQ:LRCX) +5.4% PM as in-line guide boosts semi confidence.
Xilinx (NASDAQ:XLNX) -8.1% PM on profit miss, Solarflare acquisition.
ServiceNow (NYSE:NOW) +4.5% AH on earnings beat and guidance raise.
Martin Midstream Partners (NASDAQ:MMLP) -20% PM on earnings miss and distribution cut.
O’Reilly Automotive (NASDAQ:ORLY) -4.4% AH on revenue miss.
Spirit Airlines (NYSE:SAVE) -5.7% AH as market doesn’t cheer the guidance.
Boston Beer (NYSE:SAM) +8.9% AH strong Q1 earnings.
Today’s Economic Calendar
8:30 Durable Goods
8:30 Initial Jobless Claims
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $32B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings from Morningstar