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French economy slips into recession. France slid into recession during Q1 as the French economy contracted 0.2% Q/Q after shrinking by the same amount in Q4. With unemployment at record levels and President François Hollande's popularity at all-time lows, the country faces an uphill battle to right the ship as it struggles to bring its deficit in line with the EU-mandated 3%, while simultaneously restoring growth. Economists project a 0.2% contraction for the full year and a survey of French citizens shows just 11% believe Hollande can bring down the jobless rate by year's end.

CBO slashes deficit estimate. The federal deficit will narrow to $642B in the fiscal year ending in September, the CBO said Tuesday — a meaningful improvement from February's projection of $845B. The revision comes courtesy of higher tax receipts and dividend payments to the Treasury from Fannie (OTCQB:FNMA) and Freddie (OTCQB:FMCC). The government can now skirt the federal borrowing limit until October or November. The CBO sees a deficit of 3.4% in FY14 and 2.1% in FY15, before the figure begins to rise anew on increased spending.

Top Stock News
Dimon likely to keep dual role. Insiders at JPMorgan (NYSE:JPM) believe Jamie Dimon has the votes to support his dual roles of CEO and Chairman, Charlie Gasparino reported Tuesday. Key will be big votes from BlackRock and T. Rowe Price due in a few days, and execs feel they have won those. If Dimon loses? "He won't leave them in the lurch ... he will groom a successor," people close to the situation told Gasparino. WSJ said yesterday evening that early voting shows support for splitting Dimon's roles is only slightly ahead of the 40% the proposal received last year.

Oil majors scrutinized over prices. Authorities conducted raids Tuesday at the offices of Statoil (NYSE:STO), BP, and Shell (NYSE:RDS.A) as part of a probe by European investigators into suspected anti-competitive practices (i.e. collusion). The suspected violations are related to the Platts' Market-On-Close price assessment process, used to report prices for crude oil, refined oil products and biofuels, and may have been ongoing since 2002. Even small distortions of assessed prices may have an outsized impact, the European Commission says.

Cisco earnings on deck. Investors will get a look at how Cisco (NASDAQ:CSCO) is navigating a challenging environment for tech spending when the company reports after the bell Wednesday. Recent comments from the likes of Oracle (NYSE:ORCL) and Juniper Networks (NYSE:JNPR) have some taking a cautious approach, as analysts from Pacific Crest and RBC have expressed concern that the ubiquitous "challenging macroeconomic climate" could weigh on the company's results. Expectations are for EPS of $0.49 on revenue of $12.18B.

HSBC slashes jobs, continues turnaround. As expected, HSBC (HBC) announced 14K more job cuts Wednesday as it tries to trim $3B in costs and increase shareholder returns. The challenging global economic environment may pinch revenues and make it difficult for the bank to meet its 12-15% ROE target for FY13, but management believes the target will be hit in FY14-FY16. CEO Stuart Gulliver says the bank intends to hike dividends and may repurchase stock to offset any dilution investors experience as a result of some shareholders taking their dividends in the form of additional shares. In addition to its ROE and cost savings targets, the bank is aiming to raise its tier 1 capital ratio above 10% over the next three years.

Myriad Genetics gets boost from Jolie op-ed. Myriad Genetics (NASDAQ:MYGN) rose 3% Tuesday on the back of a New York Times op-ed piece by Angelina Jolie outlining her decision to have a double mastectomy after learning she had an 87% chance of developing breast cancer. MYGN holds the patent on the test that made the determination, as well as the genes themselves. The test looks for defects in the BRCA1 or BRCA2 genes, which are the cause of most hereditary breast cancer cases.

Boeing resumes 787 deliveries. Boeing (NYSE:BA) officially resumed deliveries of the 787 Dreamliner Tuesday, the latest step towards putting the lithium-ion battery fiasco squarely in the rearview. The first delivery since January 16 was made to All Nippon Airways yesterday and the company said it still expects to deliver 60 of the planes this year. Profit margins may be pinched in the interim however, as the planes now making their way to customers are also some of the earlier jets, which cost more to produce and were discounted to lull buyers, Reuters said.

Top Economic & Other News
Germany avoids recession, revises down Q4 GDP data. Unlike its less economically fortunate eurozone core compatriot France, Germany managed to avoid falling into recession in Q1, albeit by the narrowest of margins. The German economy expanded by 0.1% during the quarter, less than the 0.3% growth economists expected, as harsh winter weather, falling exports, and lackluster investment took their toll. Germany's statistics office also revised down its GDP data for Q4, saying the economy shrank by 0.7% during the period, more than the 0.6% contraction previously reported. The data come on the heels of ZEW's investor confidence reading which showed persistent worries about the state of the eurozone economy writ large continue to weigh on sentiment.

BOE's King sees recovery. "There is a welcome change in the economic outlook," outgoing Bank of England Governor Mervyn King said Wednesday in his last quarterly Inflation Report before he retires in July. King proclaimed that although the recession "hasn't been typical," a recovery in the U.K. is "in sight," as the British economy should grow by 0.5% in Q2, up from 0.3% in Q1. Meanwhile, inflation is seen peaking at 3.1% in Q3. The comments underscore the BOE's recent decision to keep rates and QE on hold.

BofA Merrill Lynch cuts China growth forecast. Following JPMorgan's lead, BofA Merrill Lynch on Tuesday slashed its forecast for economic growth in China citing "sluggish external demand [and] continued headwinds for China-related asset prices." The bank's economists had reserved judgement following weaker-than-expected Q1 data, but have since changed their minds (apparently not impressed by last week's supposedly inflated trade data) and now say GDP growth should come in at 7.6% for the full year versus previous projections of an 8% expansion.

Lockheed Martin quietly wins over F-35 critics. Lockheed Martin's (NYSE:LMT) CEO Marilyn Hewson "isn't surprised" that Australia is set to buy 100 F-35s and that Singapore and South Korea seem to be leaning toward purchasing the troubled fighter. Hewson said Tuesday that despite a history of delays and soaring costs, the F-35 (now the most expensive defense program in U.S. history) is winning over international support. "You can feel the momentum accelerating," Hewson noted. Even the jet's critics seem to be coming around: LMT's marketing campaign has been "highly effective and successful," said Winslow Wheeler, director of a Washington-based nonprofit that keeps tabs on government spending.

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Today's Markets:
In Asia, Japan +2.29% to 15096. Hong Kong +0.5% to 23044. China +0.35% to 2224. India +2.49% to 20212.
In Europe, at midday, London +0.08%. Paris +0.33%. Frankfurt +0.17%.
Futures at 7:00: Dow +0.06%. S&P -0.02%. Nasdaq: Flat. Crude -0.8% to $93.46. Gold -1.01% to $1410.00.

Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Empire State Mfg Survey
9:00 International Capital Flow
9:15 Industrial Production
10:00 NAHB Housing Market Index
10:00 E-Commerce Retail Sales
10:30 EIA Petroleum Inventories

Notable earnings before today's open: AG, AH, CSC, DE, EJ, GLOG, M, OXF, PF, SVNT, WMC

Notable earnings after Wednesday's close: ANW, CSCO, EGLE, JACK, NTES, SB, SKX, SVM, THMC, YOKU

See full real-time earnings coverage »

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Source: Wall Street Breakfast: Must-Know News