Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data

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Economy
Shadowing a string of soft U.S. economic data, the dollar hovered near a one-week low against a basket of major currencies on Friday and was on track for its biggest weekly drop in a month. The dollar index, which last traded at 97.23 (-0.7%), set a fresh one-week low this morning - down 1.8% so far this week. If U.S. consumer inflation data due later today also disappoints, it could reinforce the view the Fed will delay a rate hike in June and add further pressure against the dollar.

In a change of heart, the Federal Reserve will allow big U.S. banks to use some types of municipal bonds to meet new rules that ensure they have enough cash during a market meltdown, WSJ reports. At issue is the treatment of municipal debt under new liquidity requirements, which call for large banks to hold enough "high-quality liquid assets" to fund their operations for 30 days. Other regulators, including the OCC and FDIC, do not plan to follow the Fed's new criteria.

German government bonds continued to break records this morning, buoyed by the ECB's commitment to stimulus, coupled with investors' appetite for low-risk assets amid growing concerns over Greece. In early trade, the yield on Germany's 10-year bond slipped to 0.070%, breaking through Thursday's all-time low. The yield on the country's 30-year debt was just below half a percentage point. "Liquidity is drying up in Greece," Greek Finance Minister Yanis Varoufakis said Thursday in Washington. Athens will continue to "compromise for a speedy agreement, but will not be compromised."

Saudi Arabia will open its $530B stock market to foreign investments on June 15, giving international investors direct access to the Middle East's largest economy. In 2008, Saudi Arabia began permitting foreign investors indirect access to the market through swaps, but is now looking to fully open the market as it pushes to diversify its petrodollar-dependent economy by boosting the private sector. The Saudi Tadawul Index is up 10% YTD.

Stocks
Hurt by a stronger dollar and the loss of several co-branded tie-ups, American Express (NYSE:AXP) reported quarterly revenue that fell short of analysts' estimates, dropping 2.7% to $7.95B vs. $8.2B consensus. AmEx recently ended its co-branded relationship with JetBlue (NASDAQ:JBLU) and Costco (NASDAQ:COST) in Canada, while its agreement with Costco in the U.S. is due to expire next March. AMX -1.6% premarket.

AMD -12.9% premarket after the chipmaker announced a wider-than-expected first-quarter loss and missed revenue expectations. AMD also announced that it would exit its high-density server business, the fruits of its $334M 2012 acquisition of SeaMicro. For the current quarter, the company forecast a revenue decrease of 3% Q/Q, implying a range of $970M-$1.03B and below a $1.13B consensus.

Bloomberg's trading terminal experienced a global outage this morning, with traders complaining all over Twitter they had been hit by the issue. The terminal is currently unavailable worldwide, Bloomberg confirmed to CNBC, as it looks into the causes of the issue.

Starting April 19, Verizon's (NYSE:VZ) FiOS service will offer new TV packages aimed at giving customers flexibility to purchase only certain groups of channels they want to watch. "While this is not all-the-way a la carte, customers have the ability to consolidate and collapse the kind of content they want to view," announced President of Verizon FiOS Tami Erwin. FiOS’s cheapest plan will cost $55/month and include two channel packs, while each additional package (which can consist of 10-17 channels) will cost $10/month.

Volkswagen is expected to issue a statement today following a meeting of top executives on Thursday afternoon to discuss the leadership rift at the German automaker, a source told Reuters. Chairman Ferdinand Piech, who has spent almost 22 years leading VW (OTCQX:VLKAY) including nine as CEO, said last week he had "distanced" himself from CEO Martin Winterkorn, prompting a full-blown crisis in the company's top management.

WikiLeaks has published a large trove of emails and documents stolen from Sony Pictures (NYSE:SNE) in November, dealing a blow to the movie studio, which had appeared to be recovering from the attack. While Sony strongly condemned the indexing of the stolen data, WikiLeaks said it offered a "rare insight" into the inner workings of a "large, secretive multinational corporation." The archive contains over 30K documents and 173K emails from more than 2K addresses.

Schlumberger shares rose slightly after the oil equipment provider topped first-quarter earnings projections, although revenue missed. Excluding charges, the company booked a per-share profit of $1.06, beating estimates of $0.91, but down from $1.21 a year earlier. Blaming a decline in drilling activity, Schlumberger (NYSE:SLB) said it now plans to cut 11,000 more jobs in addition to the 9,000 job cuts announced in January. SLB +1.6%premarket.

Growth in emerging markets helped Nestle beat expectations for organic sales last quarter, but strength in the Swiss franc kept a lid on overall revenues. The Swiss company reported 4.4% organic growth, ahead of estimates of 4.2%, but revenue of 20.92B Swiss francs ($21.86B) was slightly below expectations of 21.2B francs. With sales higher in all geographies, Nestle (OTCPK:NSRGY) confirmed its full-year outlook for 5% organic growth this year.

Lafarge and Holcim have given details regarding their asset disposals in the U.S., as part of their planned $44B merger due to close in July. Lafarge (OTCPK:LFRGY) will sell its Davenport cement plant in Iowa and seven terminals along the Mississippi River to Summit Materials (NYSE:SUM) for $450M in cash plus Summit's Bettendorf, Iowa cement terminal. Holcim (OTCPK:HCMLY) will dispose of three terminals in Michigan and Illinois, as well as slag grinding stations in Illinois and New Jersey.

Goldman Sachs' blockbuster performance in stock trading last quarter has some Wall Street watchers speculating whether it beat rival Morgan Stanley (NYSE:MS) out of the top spot in equities. Goldman (NYSE:GS) was head-and-shoulders above Morgan Stanley for many years in stock trading, but recently the latter gained ground: Morgan Stanley's 2014 stock-trading revenue surpassed Goldman's for the first time in at least a decade. Analysts have cautioned that while Goldman had a good quarter, broader challenges, such as electronic trading and tighter regulation, still exist. Investors will see whether Morgan Stanley's crown will fall next week.

Today's Markets:
In Asia, Japan -1.2% to 19653. Hong Kong -0.3% to 27653. China +2.2% to 4288. India -0.8% to 28442.
In Europe, at midday, London -0.5%. Paris -1.4%. Frankfurt -1.6%.
Futures at 6:20: Dow -0.8%. S&P -0.8%. Nasdaq -1%. Crude -0.7% to $57.71. Gold +0.7% to $1205.90.
Ten-year Treasury Yield -2 bps to 1.88%

Today's economic calendar:
8:30 Consumer Price Index
9:55 Reuters/UofM Consumer Sentiment
10:00 Leading Indicators

Notable earnings before today's open: CMA, FHN, GE, HON, RAI, STX, SYF

Source:http://seekingalpha.com/article/3077256-wall-street-breakfast-dollar-drifts-ahead-of-consumer-inflation-data