EconomyOil extended losses to a seventh day, with crude futures down 2.2% at $44.20, ahead of stockpiles data and the Federal Reserve's monetary policy decision. U.S. crude stocks are forecast to have surged for the tenth straight week to a new record high, fueling new supply concerns of a global oil glut. The Fed is also likely to cut the word "patient" from its policy statement, leaving the door wide open for a rate hike in June.
Japanese shares rose today after data showed exports rising at a faster-than-expected pace in February and Nintendo (OTCPK:NTDOY) jumped on its entrance to the smartphone gaming industry. The Nikkei closed up 0.6% at 19,544 as Japanese exports grew for the sixth straight month, helped by a weaker exchange rate and strength in the U.S. economy. Nintendo soared 21% to its daily limit of ¥17,080, after remaining untraded during trading hours as its buy orders outnumbered sales.
Prime Minister Benjamin Netanyahu's Likud party unexpectedly pulled ahead of his main rival in Israel's election, putting him in a leading position to form a governing coalition. Citing unofficial results with 99% of the vote counted, Israeli media reported that Netanyahu captured 29 seats in the 120-member Knesset, five more than Isaac Herzog’s Zionist Union. The TA-25 stock index is still closed for today, while the USD-ILS is flat at 4.0122 shekels.
Greece frustrated its main creditors yesterday by refusing to update euro zone peers on its reform progress at a scheduled teleconference, insisting that the discussions should be escalated to tomorrow's EU summit. "For many people the teleconference this afternoon could be something of a last straw," said one euro zone official. Athens is likely to run out of cash by the end of the month and may then default on its debt, potentially forcing itself out of the euro zone.
Stocks
The DOJ is considering revoking years-old settlements and prosecuting banks for manipulating interest rates should they be found to have committed currency-rigging after deals were negotiated. "Where banks fail to live up to their commitments, we will hold them accountable," said the DOJ's Leslie Caldwell. "The criminal division will not hesitate to tear up a DPA or NPA and file criminal charges." Affected institutions: Barclays (NYSE:BCS), Royal Bank of Scotland (NYSE:RBS), UBS (NYSE:UBS) and HSBC (NYSE:HSBC).
The DOJ is considering revoking years-old settlements and prosecuting banks for manipulating interest rates should they be found to have committed currency-rigging after deals were negotiated. "Where banks fail to live up to their commitments, we will hold them accountable," said the DOJ's Leslie Caldwell. "The criminal division will not hesitate to tear up a DPA or NPA and file criminal charges." Affected institutions: Barclays (NYSE:BCS), Royal Bank of Scotland (NYSE:RBS), UBS (NYSE:UBS) and HSBC (NYSE:HSBC).
Shares of Goldman Sachs' business-development company are set to begin trading on the NYSE under ticker symbol "GSBD", after Goldman (NYSE:GS) priced 6M shares of its specialty lending arm at $20 apiece, raising $120M. Business-development companies are seen as particularly advantageous to banks because they operate with few of the restrictions that regulators have recently placed on financial institutions engaged in risky or leveraged lending practices. Other banks that have launched BDCs include Credit Suisse (NYSE:CS) and Morgan Stanley (NYSE:MS).
Due to rising risks from shrinking reserves, Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) could require more bailouts from U.S. taxpayers, said the FHFA's Inspector General in a report today. The firms could chalk up losses on their derivatives portfolios again, similar to those they reported in the fourth quarter, increasing "the likelihood of additional Treasury investment," the report continued. The possibility of another taxpayer draw raises pressure on Congress to overhaul housing finance laws, although new legislation is not expected anytime soon.
Microsoft has confirmed that it will not use the Internet Explorer name for the main browser it plans to ship with Windows 10. The revised software, codenamed Project Spartan, is intended to catapult Microsoft (NASDAQ:MSFT) beyond the Web 1.0 world for which IE was designed. Although being pushed into retirement, the Internet Explorer name will live on, and will be included in the next Windows launch for enterprise compatibility.
Facebook is updating its PC and mobile Messenger apps to allow users to send cash to each other. Once users link a Visa (NYSE:V) or MasterCard (NYSE:MA) debit card to their Messenger account, they will be able to send their friends money for free by tapping a dollar sign in the chat box. Some are now speculating that WhatsApp will also join rival messaging platforms to support payments. FB +0.6% premarket.
Adobe -3.8% premarket after projecting light guidance for next quarter compared to analyst estimates. While the outlook was weak, Adobe (NASDAQ:ADBE) posted a surge in profit as it switched its revenue base to subscription cloud services rather than product sales. The software maker added 517K Creative Cloud subscribers in FQ1, but predicted EPS of $0.41-$0.47 on revenue of $1.125B-$1.175B in FQ2, below a consensus of $0.48 on $1.18B.
Oracle reported flat third-quarter revenue and slightly lower profit as the U.S. dollar strengthened, but raised its quarterly dividend 25% and provided satisfactory forex-adjusted FQ4 guidance. Net income, however, fell 2.7% Y/Y to $2.5B. Oracle (NYSE:ORCL) is also in the middle of transitioning from selling high-price traditional software installed on computers to software delivered over the Web, which is often sold to a broader base of customers. ORCL +1.7% premarket.
Joining other major domestic firms, Toyota (NYSE:TM) says it will raise its monthly base worker salary by ¥4,000, its biggest hike in over a decade. Higher wages are considered key for sustaining growth and ending deflation in Japan, and Prime Minister Shinzo Abe has called on companies to do their part and lift worker pay.
Kraft is recalling 242,000 Macaroni & Cheese Dinner cases due to "the possibility that some boxes may contain small pieces of metal." The cases contained over 6.5M individual boxes. Kraft (NASDAQ:KRFT) received eight consumer complaints about the product, although no injuries have yet been reported.
California federal judge Dale Fischer has thrown out a shareholder class-action suit accusing Herbalife (NYSE:HLF) of running a pyramid scheme, arguing there was no evidence the company had made disclosures to investors that caused its shares to fall. Fischer rejected the plaintiffs' argument that a December 2012 presentation from Bill Ackman's Pershing Square Capital, which called Herbalife a pyramid scheme, was a corrective disclosure. HLF+3.7% premarket.
Lumber Liquidators has sent free "idiot-proof" formaldehyde test kits following the damaging 60 Minutes report that accused the company of selling contaminated laminate flooring from China. Environmental Diagnostics Laboratory, which manufactures and analyzes the kits, estimates it sent out 3,000-5,000 sets so far. LL shares have tumbled 42.7% since the report surfaced on March 1.
American Express is teaming up with big-name companies such as Macy's (NYSE:M), Exxon Mobil (NYSE:XOM), AT&T (NYSE:T) and Rite Aid (NYSE:RAD) to launch a loyalty program, called Plenti, which will operate similar to drugstore-rewards programs. The announcement comes as AmEx (NYSE:AXP) prepares for the end of its 16-year relationship with Costco (NASDAQ:COST) after the two couldn’t agree on terms.
Today's Markets:
In Asia, Japan +0.6% to 19544. Hong Kong +0.9% to 24120. China +2.1%to 3577. India -0.4% to 28622.
In Europe, at midday, London +0.6%. Paris -0.4%. Frankfurt -1%.
Futures at 6:20: Dow -0.1%. S&P flat. Nasdaq flat. Crude -2.2% to $44.20. Gold -0.1% to $1146.60.
Ten-year Treasury Yield -4 bps to 2.06%
Today's economic calendar:
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:00 PM FOMC Forecast
2:00 PM Chairman Press Conference
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:00 PM FOMC Forecast
2:00 PM Chairman Press Conference
Notable earnings after today's close: CLC, CTAS, GES, GOMO, JBL, JUNO,MLHR, RENN, SCVL, SLW, TLYS, WSM
Source: http://seekingalpha.com/article/3009336-wall-street-breakfast-markets-await-fed-policy-decision
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