EconomyThe euro continued its decline on Tuesday, hitting a new 12-year low against the dollar, as Dallas Fed President Richard Fisher reiterated that the U.S. should promptly end its easy monetary policy and press ahead with an interest rate increase. So far this month,
euro has dropped more than 400 pips, or 3.63% against the dollar. The currency also felt pressure from lower euro zone debt yields after the ECB launched a €1T bond buying program yesterday. The euro is -0.9% to 1.0751.
Adding to global currency woes, Denmark's krone and Turkey's lira are also facing trouble, as political pressure and monetary policy trigger more turbulence in the foreign exchange market. Denmark has spent the last eight weeks fighting back conjecture it would pull a Switzerland and abandon its ties to the euro, while Turkish PM Ahmet Davutoglu will hold a meeting with cabinet ministers and the country's central bank later today to discuss the lira's more than 10% loss against the dollar since the beginning of the year.
China's consumer inflation accelerated in February, rebounding from a five-year low in January, but factory prices remained entrenched in deflation, signaling a favorable environment for further easing from the government. CPI rose 1.4% on year, after the People's Bank of China introduced more stimulus measures and the Lunar New Year holiday pushed up food and transport costs. China's producer price index, however, slid 4.8% from a year ago, worsening from January’s 4.3% drop and marking three full years of declines.
Prescription drug spending rose by a record 13% in the U.S. last year, the biggest annual increase in over a decade. "For the past several years, annual drug spending increases have been below the annual rate of overall health-care inflation in the U.S.," said Glen Stettin, senior vice president at Express Scripts (NASDAQ:ESRX). "But that paradigm is shifting dramatically as prices for medications increase at an unsustainable rate." Spending on specialty medicines, such as those for inflammatory diseases, multiple sclerosis, cancer and hepatitis C rose an unprecedented 31%.
Stocks
Apple unveiled its smartwatch at a media event yesterday, showing off the product's look and features as it searches for its new growth driver. The watch comes in two sizes – 38mm and 42mm – and a choice of three models – Sport, Standard and Edition – with a variety of straps. The device will start at $350 and, depending on the band and finish, it could go into the thousands of dollars. Apple (NASDAQ:AAPL) also touted a new 12-inch MacBook that weighs two pounds, calling it the "thinnest, lightest and most beautiful" notebook ever made.
Apple unveiled its smartwatch at a media event yesterday, showing off the product's look and features as it searches for its new growth driver. The watch comes in two sizes – 38mm and 42mm – and a choice of three models – Sport, Standard and Edition – with a variety of straps. The device will start at $350 and, depending on the band and finish, it could go into the thousands of dollars. Apple (NASDAQ:AAPL) also touted a new 12-inch MacBook that weighs two pounds, calling it the "thinnest, lightest and most beautiful" notebook ever made.
In another move bolstering its video capabilities, Twitter (NYSE:TWTR) has purchased Periscope, which has been developing a live-video streaming app. The social-media company paid slightly less than $100M for the startup, sources told WSJ, making Periscope one of Twitter’s more expensive purchases. The report comes as Meerkat, another app which allows users to display live video from their phones on Twitter, took off, attracting 60K users in the eight days since it launched.
Meanwhile, despite being barred from operating inside mainland China, Twitter (TWTR) opened a small sales office in Hong Kong today to help it lure Chinese companies with global ambitions to its social media platform. "We think the timing is perfect because there are a number of these Chinese companies that are really aiming to be global now," said Peter Greenberger, who heads Twitter's emerging markets operations. The office will target potential advertising clients among China’s increasingly outward-looking business community.
Alibaba is shuffling the top ranks at its Chinese shopping platforms amid growing concerns of counterfeit goods and other problems at the e-commerce giant's marketplaces. Alibaba (NYSE:BABA) has dismissed Yilei Wang, head of the Chinese company’s Tmall.com shopping platform, from his position, though he will remain with the company. Meanwhile, Jeff Zhang, former president of Taobao, will assume control of a new business unit called "China Retail Marketplaces" that will oversee Taobao, Tmall and Juhuasuan.
"It does appear that we have more than enough overbooking to comfortably cover rates above 50, perhaps above 60 (a month)," Airbus (OTCPK:EADSY) sales chief John Leahy told the Istat air finance conference yesterday, but outlined that such a decision would be "way out in the future." Airbus last month announced plans to hike A320 output to 50 jets a month starting in 2017, rivaling Boeing (NYSE:BA), which announced plans last year to raise 737 production from 42 to 52 per month in 2018.
Boeing has pledged to improve the efficiency and seating capacity of its 777 in an attempt to boost sales of its most profitable airliner before a new version arrives early next decade. Airbus (OTCPK:EADSY) has taken similar measures with its A330 wide-body jet. Boeing's (BA) changes, including weight reduction and minor aerodynamic improvements, aim to raise the 777's efficiency by 5% per passenger.
Qualcomm +3.5% premarket after launching a $15B buyback program that will replace a prior program with $2.1B remaining. The company plans to buy back $10B worth of shares within 12 months, on top of a current commitment to return 75% of free cash flow to shareholders. Qualcomm (NASDAQ:QCOM) also raised its quarterly dividend by 14%, increasing it to $0.48 from $0.42 per share.
"Either you’re completely incompetent in your oversight duties or you knew about it," said Britain's chairwoman of the Public Accounts Committee, Margaret Hodge, as a parliamentary committee grilled HSBC (NYSE:HSBC) executives over leaked documents that showed the bank helped clients evade taxes from 2007 and before. Those in the line of fire yesterday included CEO Stuart Gulliver, head of global private banking, Chris Meares, and BBC Trust chairwoman and former chairwoman of HSBC’s audit committee, Rona Fairchild, whom Hodge told to resign.
Credit Suisse has confirmed that CEO Brady Dougan will step down in June 2015, to be replaced by the CEO of U.K. insurer Prudential (NYSE:PUK), Tidjane Thiam. Dougan has been under pressure over the bank's direction, legal woes and performance; CS shares have fallen 18% over the past year. The news also comes as Prudential reported its annual results, posting a 14% rise in operating pretax profit to £3.2B in 2014.
Today's Markets:
In Asia, Japan -0.7% to 18665. Hong Kong -0.9% to 23897. China -0.5% to 3286. India -0.5% to 28710.
In Europe, at midday, London -0.6%. Paris -0.6%. Frankfurt -0.7%.
Futures at 6:20: Dow -0.6%. S&P -0.7%. Nasdaq -0.7%. Crude -0.9% to $49.55. Gold -0.7% to $1158.10.
Ten-year Treasury Yield -4 bps to 2.19%
Today's economic calendar:
8:55 Redbook Chain Store Sales
9:00 NFIB Small Business Optimism Index
10:00 Job Openings and Labor Turnover Survey
10:00 Wholesale Trade
1:00 PM Results of $24B, 3-Year Note Auction
8:55 Redbook Chain Store Sales
9:00 NFIB Small Business Optimism Index
10:00 Job Openings and Labor Turnover Survey
10:00 Wholesale Trade
1:00 PM Results of $24B, 3-Year Note Auction
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