Wall Street Breakfast: Eurozone Manufacturing Data Adds To Recovery Hopes

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Economy
Euro-area manufacturing expanded faster than initially estimated last month, helped by growth in Spain and Italy and a stronger performance in Germany. Beating an earlier "flash" reading of 51.9, Markit's Purchasing Managers Index hit a 10-month high in March, rising to 52.2 from 51 in February. Economic momentum in the eurozone is picking up as the ECB continues its €60B a month QE program and a weaker euro aids exporters.

If Greece ends up leaving the eurozone "it may not be a bad thing for the euro," Warren Buffett told CNBC, saying "it could be a good idea (in) several ways if everybody learns that the rules mean something." The euro plunged to its largest quarterly fall on record in Q1, after Greece's latest package of proposed reforms was dismissed by lenders as more of a list of ideas rather than concrete plans. The euro is flat at $1.0734.

China has welcomed Taiwan's decision to apply to join the Asian Infrastructure Investment Bank, said Taiwan Affairs Office spokesman Ma Xiaoguang this morning. Taiwan will likely have to participate under a different name, however, due to the province's status and pressure from China. Meanwhile, Japan and Canada let Tuesday's deadline to become founding members of the AIIB pass, but have not ruled out joining the bank at a later time.

Russia's economy will continue on its downward trajectory for the next five years, warned the country's former finance minister at a round table discussion on Tuesday. "Structural reforms were not done in time. This is the most serious challenge facing the president — a stagnating economy at least for the next five years," said Alexei Kudrin, according to a report from Russian business news agency, RBC. "From 2012 to 2018 economic growth will be 1.5% (per year), in the best case - 2%."

Chinese shares gained today, extending a whirlwind first quarter rally, as new data reinforced the case for more easing in the world's second largest economy. HSBC's China Manufacturing PMI dropped to a final reading of 49.6 in March from 50.7 in February, falling below the 50-point level that separates an expansion in activity from contraction. Last month, China set an annual growth target of about 7%, down from actual growth of 7.4% in 2014 - its slowest pace in nearly a quarter century.

Talks between Iran and six world powers to settle a dispute around Tehran's nuclear program have extended beyond Tuesday's deadline, as the parties came closer to a deal but failed to agree on crucial details such as the lifting of U.N. sanctions. Oil futures are edging lower on the news amid speculation that more Iranian crude could flood into world markets if a last-minute deal is reached. Crude futures -0.9% to $47.19/bbl.

Stocks
Simon Property Group has withdrawn its $16.8B proposal to acquire Macerich (NYSE:MAC) after the smaller mall owner rejected the sweetened takeover offer as too low. "The board unanimously concluded that your proposal (of $95.50-a-share) continues to substantially undervalue Macerich," CEO Arthur Coppola said in a letter. Macerich took steps to thwart a hostile takeover following Simon's (NYSE:SPG) first public offer by adopting a poison pill on March 17. MAC -1% premarket.

New documents show that Andreas Lubitz, the co-pilot of Germanwings Flight 9525, informed Lufthansa (OTCQX:DLAKY) that he had an "episode of severe depression" while at flight-training school, raising further questions about why the airline had allowed him to complete his training. Lufthansa is expecting an insurance claim of around $300M in connection with the crash, which will be shelled out by a consortium of 10 insurers led by Allianz (OTCQX:AZSEY).

Etsy, the online craft marketplace, will kick off its IPO roadshow today, offering 16.67M shares with the hopes of raising almost $267M. At a $14-$16 IPO range, the company would command a market value of $1.55B-$1.78B. Etsy plans to list on the Nasdaq Global Select Market under the ticker "ETSY."

Web hosting company GoDaddy has priced its initial public offering at $20 per share, above its previously indicated $17-$19 range, valuing it at around $4.5B, including debt. Not counting a 3.3M-share overallotment option, it's set to raise $440M. GoDaddy shares will begin trading today on the New York Stock Exchange under the symbol "GDDY."

"The iPhone 6 Has Met Its Match," reads the headline for the WSJ's review of Samsung's (OTC:SSNLF) Galaxy S6. Reviewer/iPhone 6 (NASDAQ:AAPL) owner Joanna Stern says she's a fan of the S6's glass/metal body with dual Gorilla Glass 4 (NYSE:GLW) panes, as well as its 2K OLED display, improved fingerprint sensor, rapid charging support, and 16MP OIS-capable camera. Prior to the many reviews, there have been reports Samsung upped S6 production due to strong early interest. The phone goes on sale on April 10.

Raising more questions of executive pay, Chevron (NYSE:CVX) says its board approved salary increases for its top executives, including CEO John Watson and outgoing Vice Chairman and Executive VP George Kirkland. Watson will get a $27.5K increase to raise his base salary to $1.9M, while Kirkland, who will retire on June 15, will receive an additional $25K to boost his base salary to $1.6M. Chevron's 2014 profit fell 10% Y/Y on a 7.4% decline in revenue, while shares have dropped nearly 12% over the past 12 months.

U.S. Bankruptcy Judge Brendan Shannon has approved a plan by RadioShack (OTCPK:RSHCQ) to sell 1,743 of its stores to Standard General, which plans to operate most of them in conjunction with Sprint (NYSE:S). The ruling ends a hotly-contested, four-day hearing in which RadioShack's largest creditor, Salus Capital, opposed the sale, stating it offered a higher cash bid.

Facing heavy competition from other discounters and its promise to raise wages, Wal-Mart (NYSE:WMT) is increasing pressure on suppliers to cut the cost of their products, in an effort to reclaim the crown of low-price leader and turn around its sluggish U.S. sales. The retailer has been telling suppliers to forgo investments in joint marketing, such as eye-catching product displays or online advertisements, and plow the savings into lower prices instead.

Today's Markets:
In Asia, Japan -0.9% to 19035. Hong Kong +0.7% to 25083. China +1.7% to 3810. India +1.1% to 28260.
In Europe, at midday, London +0.9%. Paris +1.4%. Frankfurt +1%.
Futures at 6:20: Dow flat. S&P -0.1%. Nasdaq flat. Crude -0.9% to $47.19. Gold -0.1% to $1181.50.
Ten-year Treasury Yield -3 bps to 1.93%

Today's economic calendar:
Fed's Lacker: Monetary Policy
Auto sales
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 Gallup U.S. Job Creation Index
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Petroleum Inventories

Notable earnings before today's open: AYI, IKGH, MON

Notable earnings after today's close: MU, PRGS, SIGM

Source: http://seekingalpha.com/article/3044406-wall-street-breakfast-eurozone-manufacturing-data-adds-to-recovery-hopes