German jobless rate hits record low. German unemployment dropped to 6.7% in March, the lowest since comparable records began in 1998, from 6.8% in February. The decline came despite the eurozone debt crisis and indicates that the German economy may be recovering from its dip. And while new orders fell 16% in February on an annual basis, industry group VDMA expects production to pick up again in H2.
Sanctions bite as Iranian oil exports fall sharply. By the end of March, Iran's oil exports are expected to have fallen by 300,000 barrels a day from last month, an almost 14% drop from 1.9M bpd, according to oil-shipping specialist Petro-Logistics. Iran's exports are likely to further shrink if President Obama decides by Friday, as expected, that markets can adjust to less Iranian oil.
Roche caves in and raises Illumina bid. Roche (RHHBY.PK) has increased its hostile offer for Illumina (ILMN) by 15% to $51 a share, or to around $6.7B, hoping to close a deal more quickly with shareholders that have thus far been unimpressed by Roche's first offer. Illumina shares closed at $49.88 yesterday, above the initial $44.50 a share proposal. Illumina shares were +2.3% premarket.
Businesses left hanging as Justices mull Obamacare. After three days of arguments, uncertainty exists about how the Supreme Court will rule on the constitutionality of the overhaul of the $2.6T healthcare system. A decision to void the revamp would upend years of corporate planning, with insurers, for example, having to abandon programs to bring in millions of new customers. A decision is due in June.
Analysts hope to hear how Heins can revive RIM. RIM (RIMM) is due today to report its first quarterly earnings results since the appointment of Thorsten Heins as CEO two months ago, with analysts forecasting that EPS slumped 55% to $0.81 and that revenue dropped 19.1% to $4.53B. While expectations are exceptionally low, investors are hoping, in the words of Morgan Stanley's Ehud Gelblum, "to hear if [Heins] has a plan," because "it is hard to figure out how they turn this around."
Japan infected by American gridlock disease. Japan's government will draft a stop-gap budget for the first time in 14 years as lawmakers struggle to pass a spending bill before the new fiscal year starts on Sunday. A proposed sales tax increase is one of the main points of contention. The stop-gap measure will total ¥3.6T ($43.4B) to pay for spending and government costs for the first six days of April.
Japan retail sales strengthen optimism about economy. While Japan’s parliament struggles with the budget, the economy continues to show signs of recovery, with retail sales rising 3.5% on year in February, the largest gain since August 2010. The figures were boosted by a 21.4% jump in automobile sales. "Today’s report adds to evidence that Japan’s economy will return to growth this quarter," BNP Paribas economist Azusa Kato said.
TEPCO teeters on the edge of insolvency. TEPCO (TKECF.PK) faces bankruptcy unless the government approves a ¥1T ($12.2B) injection. The company's capital has fallen to ¥620B from almost ¥2T before the Fukushima disaster.
Tomorrow arrives as the sun comes out for Annie's. Shares in organic foods maker Annie's (BNNY) soared 89% on their debut yesterday, showing that frenzied enthusiasm for IPOs exists outside the Internet sector. Despite the huge rise from Annie's listing price of $19 a share, Jim Cramer reckons that the company's tremendous growth potential and its position in an attractive niche market make it a safe buy.
EU finmins to bump up rescue fund. EU finance ministers are expected to agree tomorrow to run the ESM and EFSF rescue programs side-by-side, effectively bumping the so-called firewall to €700B. They also appear ready to allow €240B in untapped funds from the EFSF to be available for another year, raising said wall temporarily to €940B.
Shades of Enron as House panel gets nowhere with MF execs. MF Global (MFGLQ.PK) executives yesterday frustrated Congressmen in a hearing about the firm's collapse, with key figure Edith O'Brien pleading the fifth, as expected, and then three others pleading ignorance. "This reminded me of a hearing we had…on Enron," where no one would admit to anything, said Rep. Michael Capuano.
Hawker Beechcraft gets ready for crash landing. Hawker Beechcraft, the aircraft manufacturer bought by Goldman Sachs' (GS) P-E arm and Onex Corp (ONEXF.PK) for $3.3B in 2007, is preparing to file for bankruptcy protection in the next several weeks, Reuters reports. Hawker has struggled to compete with larger rivals amidst the economic downturn.
S&P 500 to become Fossil-ized. Fossil (FOSL), a provider of fashion accessories, will be added to the S&P 500 to replace Medco Health (MHS) after it's acquired by Express Scripts (ESRX), provided regulators don't get in the way.
Today's Markets:
In Asia, Japan -0.7% to 10115. Hong Kong -1.3% to 20609. China -1.4% to 2252. India -0.4% to 17059.
In Europe, at midday, London -0.8%. Paris -1.1%. Frankfurt -1.1%.
Futures at 7:00: Dow -0.25%. S&P -0.3%. Nasdaq -0.3%. Crude -0.5% to $104.92. Gold -0.1% to $1656.30.
Thursday's economic calendar:
8:30 GDP Q4
8:30 Initial Jobless Claims
8:30 Corporate Profits
10:30 EIA Natural Gas Inventory
10:30 Fed's Lacker: 'Credit Markets Symposium conference'
11:00 KC Fed Manufacturing
12:15 PM Fed's Lockhart: European Economic Crisis
12:45 PM Bernanke: 'The Aftermath of Crisis'
1:00 PM Fed's Plosser: Economic Outlook
1:00 PM Results of $29B, 7-Year Note Auction
3:00 PM USDA Ag. Prices
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
6:45 PM Fed's Lacker: Economic Outlook
Barchart.com Morning Call for Thursday, March 29, 2012
Overnight Developments
Sanctions bite as Iranian oil exports fall sharply. By the end of March, Iran's oil exports are expected to have fallen by 300,000 barrels a day from last month, an almost 14% drop from 1.9M bpd, according to oil-shipping specialist Petro-Logistics. Iran's exports are likely to further shrink if President Obama decides by Friday, as expected, that markets can adjust to less Iranian oil.
Roche caves in and raises Illumina bid. Roche (RHHBY.PK) has increased its hostile offer for Illumina (ILMN) by 15% to $51 a share, or to around $6.7B, hoping to close a deal more quickly with shareholders that have thus far been unimpressed by Roche's first offer. Illumina shares closed at $49.88 yesterday, above the initial $44.50 a share proposal. Illumina shares were +2.3% premarket.
Businesses left hanging as Justices mull Obamacare. After three days of arguments, uncertainty exists about how the Supreme Court will rule on the constitutionality of the overhaul of the $2.6T healthcare system. A decision to void the revamp would upend years of corporate planning, with insurers, for example, having to abandon programs to bring in millions of new customers. A decision is due in June.
Analysts hope to hear how Heins can revive RIM. RIM (RIMM) is due today to report its first quarterly earnings results since the appointment of Thorsten Heins as CEO two months ago, with analysts forecasting that EPS slumped 55% to $0.81 and that revenue dropped 19.1% to $4.53B. While expectations are exceptionally low, investors are hoping, in the words of Morgan Stanley's Ehud Gelblum, "to hear if [Heins] has a plan," because "it is hard to figure out how they turn this around."
Japan infected by American gridlock disease. Japan's government will draft a stop-gap budget for the first time in 14 years as lawmakers struggle to pass a spending bill before the new fiscal year starts on Sunday. A proposed sales tax increase is one of the main points of contention. The stop-gap measure will total ¥3.6T ($43.4B) to pay for spending and government costs for the first six days of April.
Japan retail sales strengthen optimism about economy. While Japan’s parliament struggles with the budget, the economy continues to show signs of recovery, with retail sales rising 3.5% on year in February, the largest gain since August 2010. The figures were boosted by a 21.4% jump in automobile sales. "Today’s report adds to evidence that Japan’s economy will return to growth this quarter," BNP Paribas economist Azusa Kato said.
TEPCO teeters on the edge of insolvency. TEPCO (TKECF.PK) faces bankruptcy unless the government approves a ¥1T ($12.2B) injection. The company's capital has fallen to ¥620B from almost ¥2T before the Fukushima disaster.
Tomorrow arrives as the sun comes out for Annie's. Shares in organic foods maker Annie's (BNNY) soared 89% on their debut yesterday, showing that frenzied enthusiasm for IPOs exists outside the Internet sector. Despite the huge rise from Annie's listing price of $19 a share, Jim Cramer reckons that the company's tremendous growth potential and its position in an attractive niche market make it a safe buy.
EU finmins to bump up rescue fund. EU finance ministers are expected to agree tomorrow to run the ESM and EFSF rescue programs side-by-side, effectively bumping the so-called firewall to €700B. They also appear ready to allow €240B in untapped funds from the EFSF to be available for another year, raising said wall temporarily to €940B.
Shades of Enron as House panel gets nowhere with MF execs. MF Global (MFGLQ.PK) executives yesterday frustrated Congressmen in a hearing about the firm's collapse, with key figure Edith O'Brien pleading the fifth, as expected, and then three others pleading ignorance. "This reminded me of a hearing we had…on Enron," where no one would admit to anything, said Rep. Michael Capuano.
Hawker Beechcraft gets ready for crash landing. Hawker Beechcraft, the aircraft manufacturer bought by Goldman Sachs' (GS) P-E arm and Onex Corp (ONEXF.PK) for $3.3B in 2007, is preparing to file for bankruptcy protection in the next several weeks, Reuters reports. Hawker has struggled to compete with larger rivals amidst the economic downturn.
S&P 500 to become Fossil-ized. Fossil (FOSL), a provider of fashion accessories, will be added to the S&P 500 to replace Medco Health (MHS) after it's acquired by Express Scripts (ESRX), provided regulators don't get in the way.
Today's Markets:
In Asia, Japan -0.7% to 10115. Hong Kong -1.3% to 20609. China -1.4% to 2252. India -0.4% to 17059.
In Europe, at midday, London -0.8%. Paris -1.1%. Frankfurt -1.1%.
Futures at 7:00: Dow -0.25%. S&P -0.3%. Nasdaq -0.3%. Crude -0.5% to $104.92. Gold -0.1% to $1656.30.
Thursday's economic calendar:
8:30 GDP Q4
8:30 Initial Jobless Claims
8:30 Corporate Profits
10:30 EIA Natural Gas Inventory
10:30 Fed's Lacker: 'Credit Markets Symposium conference'
11:00 KC Fed Manufacturing
12:15 PM Fed's Lockhart: European Economic Crisis
12:45 PM Bernanke: 'The Aftermath of Crisis'
1:00 PM Fed's Plosser: Economic Outlook
1:00 PM Results of $29B, 7-Year Note Auction
3:00 PM USDA Ag. Prices
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
6:45 PM Fed's Lacker: Economic Outlook
Barchart.com Morning Call for Thursday, March 29, 2012
Overnight Developments
- Global stocks this morning are lower with the Euro Stoxx 50 down -0.83% and Jun S&Ps down -5.00 points. The dollar and Treasuries rose while stocks and commodities declined after the head of sovereign ratings at Standard & Poor's said Greece will probably have to restructure its debt again and this may involve bailout partners such as European governments. The IMF mission chief to Greece added that while the country has made an "aggressive" fiscal adjustment, it will take at least a decade to fully complete the country's restructuring. Another negative for European stocks and the euro was the unexpected -0.1 point decline in Mar Euro-Zone economic confidence to 94.4, weaker than expectations of +0.1 to 94.5. On the positive side, Mar German unemployment fell -18,000, more than expectations of -10,000, while the Mar unemployment rate unexpectedly fell -0.1 to 6.7%, better than expectations of unchanged at 6.8% and the lowest since data for a reun ified Germany began in 1991. Crude oil prices declined after French Premier Fillon told France Inter Radio that the prospects of an accord between the U.S. and Europe on tapping strategic oil reserves are "good."
- Asian stocks today closed lower with Japan down -0.67%, China -1.28%, Australia -0.13%, South Korea -0.93%, India -0.37%. Asian stocks closed lower on concerns China's economic slowdown is weighing on company earnings and after U.S. durable goods orders rose less than expected. The yen rose against the dollar, which weakened Japanese exporters, on speculation Japanese companies will repatriate overseas earnings before the end of the fiscal year on Mar 31. A bullish factor for Japanese stocks was the +2.0% m/m and +3.5% y/y increase in Feb Japan retail sales, stronger than expectations of unchanged m/m and +1.4% y/y, with the +3.5% y/y increase the biggest gain in 1-1/2 years. China's Shanghai Stock Index slipped to a 2-1/4 month low on concern the slowing economy is undercutting company earnings. Data from Bloomberg show 505 companies in the Shanghai Composite have released annual earnings with an average profit growth of 17%, compared with 38% growth in the previous year.
