Japan revises Q4 GDP up to show growth. Japan appears to have recovered from its recession after revised Q4 GDP numbers showed annualized growth of 0.2% vs a preliminary reading of -0.4%. Private consumption and public investment boosted the economy, while a smaller-than-initially estimated drop in capital spending indicates that the falling yen may be easing corporate pessimism. The new data has helped boost global shares, with the Nikkei rising 2.6% to 12,283.62, its highest close since September 2008.
Fed Stress Tests: All but Ally Financial pass. Eighteen major banks have passed the Fed's stress tests, showing they'd have a Tier 1 Common Ratio of over 5% in the central bank's "severely adverse" economic scenario. That includes GDP slumping 5%, unemployment of 12%, a 50% fall in stocks and recessions overseas. Only Ally Financial failed, while Citigroup (NYSE:C) came out as the most overcapitalized of the largest banks with an 8.3% common ratio. The bank has requested permission for a $1.2B share buyback and the maintenance of its $0.01 dividend.
Job markets seen continuing slow improvement. Unemployment data for February is due out this morning, with economists estimating that nonfarm payrolls grew by 160,000 vs 157,000 in January. That would leave the jobless rate unchanged at 7.9%. The number of vacancies has grown to heights not seen for a number of years, but employers are taking much longer to fill those openings.
Top Stock News
Hearings could further delay 787 takeoff. As expected, the National Transportation Safety Board's "interim factual report" on the Boeing (NYSE:BA) 787's battery problems didn't provide the reason why two malfunctioned, although it did say that Boeing considered the possibility of the components burning to be extremely remote. The NTSB plans to hold two public hearings on the battery, which will probably delay the resumption of Dreamliner flights even further.
Barclays CEO wants to slash 40,000 jobs in 10 years. Barclays (NYSE:BCS) CEO Antony Jenkins reportedly wants the bank to cut almost 30% of its employees over the next ten years as he prioritizes lowering expenses. The only question, Jenkins told a recent shareholders' meeting, is "how can you eventually turn this bank into one that can operate with 100,000 staff instead of 140,000?" The comments follow Barclays' recent announcement of major job and cost cuts.
Pandora tops expectations but CEO quits. Pandora (NYSE:P) shares jumped 20.3% premarket despite the company surprising investors by saying that Chairman and CEO Joe Kennedy is resigning. "My head is telling me it's time to get to a recharging station sooner rather than later," Kennedy told the company's FQ4 earnings call. During the period, Pandora's net loss widened to $14.6M from $8.18M, but adjusted losses per share of $0.04 beat consensus, as did revenue of $125.1M, which was up 54%.
KKR to buy Gardner Denver for $3.74B. After a sales process that has dragged on for months, KKR (NYSE:KKR) has reportedly agreed to acquire Gardner Denver (NYSE:GDI) for $76 a share, or 2.9% above the latter's closing price of $73.85 yesterday. The deal values the industrial-pumps manufacturer at $3.74B; it would be KKR's third purchase of a company in the industrial sector in the past few years.
Judge orders Macy's, Martha and Penney to start talking. Justice Jeffrey Oing has ordered Macy's (NYSE:M), J.C. Penney (NYSE:JCP) and Martha Stewart Living Omnimedia (NYSE:MSO) into mediation to sort out their dispute over JCP's deal to sell Martha Stewart products in its stores despite the latter's contract with Macy's. Macy's CEO Terry Lundgren and Martha Stewart had already made a start before Oing's order, speaking to each other for the first time in 15 months.
Motorola laying off 1,200 more workers. Motorola Mobility has started to let go 1,200 employees in the U.S., China and India, or over 10% of its staff, as the Google (NASDAQ:GOOG) unit continues its efforts to return to profitability. "Our costs are too high, we're operating in markets where we're not competitive and we're losing money," Motorola said in a company email. The cuts add to 4,000 redundancies that the firm announced last summer.
Tesla to repay $465M in loans five years early. Tesla Motors (NASDAQ:TSLA) plans to repay $465M in Energy Department loans five years early in 2017, the company said yesterday in its annual report. Under new terms of its debt agreement with the DOE, warrants that Tesla issued to the government will vest in 2018 if the loans are not paid off, enabling Energy to purchase over 3M company shares at a discount.
Computer reseller CDW hires banks for IPO. CDW has reportedly brought in banks in preparation for an IPO that could raise $750M later this year. The flotation would come six years after the electronics retailer was taken private for $7.3B by private-equity firms Madison Dearborn and Providence. CDW is one of the largest computer resellers in the U.S., generating net sales of $10.1B in 2012.
Cablevision accuses Viacom of being a billion dollar bully. Cablevision (NYSE:CVC) has accused Viacom (NYSE:VIA) of forcing it to carry 14 low-rated channels the cable company doesn't want to in order to broadcast networks that it does want, or face a penalty of $1B. In a lawsuit, Cablevision is seeking to void an agreement between the companies, with the case being closely watched as pay-TV firms increasingly rebel against bundling deals.
Smithfield under pressure to break up into three. Smithfield Foods (NYSE:SFD) has received a letter from Continental Grain urging the company to consider a split into three separate units. Continental - which holds a 6% stake in Smithfield Foods - also asked the hog producer to consider paying out a regular cash dividend.
Top Economic & Other News
China posts unexpected trade surplus. China's trade surplus fell to $15.25B in February from $29.15B in January but beat expectations for a deficit of $7.75B. Exports jumped 25% and imports dropped 8.8%. As the data is distorted by the Chinese New Year, analysts look at January and February combined, when exports rose 23.6% and imports 5%. However, while exports have been improving, says Goldman Sachs' Song Yu, "it is not strong enough to sustain the robust growth we saw in February."
In Asia, Japan +2.6% to 12284. Hong Kong +1.4% to 23092. China -0.2% to 2319. India +1.4% to 19680.
In Europe, at midday, London +0.4%. Paris +1%. Frankfurt +0.6%.
Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude -0.2% to $91.35. Gold +0.1% to $1576.80.
Today's economic calendar:
8:30 Nonfarm payrolls
10:00 Wholesale Trade
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