Top German court makes non-decision over ECB bond-buying. Is Germany's fabled Constitutional Court abdicating its authority? Faced with a decision over whether the European Central Bank's bond-buying program is legal, the German judges have handed the issue over to the European Court of Justice. The German judges strongly suggested that the program could be illegal, but if they had ruled that, they could have caused all sorts of chaos in the markets. Instead, markets were nice and calm at the time of writing.
Apple repurchases $14B of stock in two weeks. Apple (AAPL) has bought back $14B worth of shares in the fortnight since it released its disappointing FQ1 results. The company has now acquired over $40B in stock during the past year as part of a plan to buy back $60B in shares. However, the transactions might not satisfy Carl Icahn, who has put forward a proposal for Apple's shareholders meeting at the end of the month for the company to repurchase an extra $50B of stock by the end of September. Shares were +2.2% premarket.
Global stocks higher as investors await U.S. jobs data. European shares and U.S. stock futures had followed Asian equities higher at the time of writing following sharp gains on Wall Street yesterday and prior to the release of U.S. employment data today. Economists estimate that nonfarm payrolls increased by 180,000 in January after rising 74,000 in December, while the jobless rate is seen holding at a five-year low of 6.7%.
Top Stock News
LinkedIn tumbles on disappointing guidance. LinkedIn's (LNKD) Q4 earnings beat Street expectations, but shares in the online professional-networking service dropped 7.4% premarket after it provided revenue guidance that was below consensus. Q4 net income fell to $3.8M from $11.5M a year earlier, while adjusted EPS was $0.39 and sales rose 47% to $447.2M. LinkedIn's Talent Solutions (jobs) growth moderated a bit, rising 53% vs 62% in Q3. Likewise, subscription revenue growth slowed to 48% from 61%.
IBM mulls options for chip operations - reports. IBM (IBM) is considering a sale of its semiconductor manufacturing operations, which produce chips for its high-end servers and for external customers, the WSJ reports. However, IBM would keep its chip-design operations; alternatively, according to an earlier FT article, IBM could keep the whole business and seek a partner with which to create a joint venture. The FT reported about the prospective sale but didn't distinguish between the production and design parts of the division.
ArcelorMittal core profit rises 23% to $1.91B. ArcelorMittal's (MT) Q4 EBITDA climbed 23% to $1.91B, topping analyst forecasts of $1.8B, as revenue increased 2.8% to $19.85B. Profits were boosted by a 4.4% rise in steel shipments to 21M tons, a 56% increase in marketable iron-ore shipments, cost savings and asset restructuring. ArcelorMittal is cautiously optimistic about its prospects, and forecasts that 2014 EBITDA will grow to $8B from $6.89B in 2013. Consensus is for $8.1B. Shares were +2.35% premarket.
Lions Gate beats on both lines. Lions Gate (LGF) rode the back of the "Hunger Games" sequel to a strong fiscal third quarter, but the company also did a little work on the expense side and balance sheet to help profitability. Income jumped to $88.8M from $37.8M as revenues increased 12.9% to $839.9M and topped consensus, as did EPS of $0.63.
Top Economic & Other News
Debt-cap suspension expires. The suspension of the U.S. debt limit ends today, giving the Treasury a few weeks to juggle the money about to stave off a default before running out of cash. Great battles have been fought over raising the ceiling, which stands at $16.7T, but there seems to be little stomach for a new fight, so Congress will probably increase the cap without too much of a fuss this time around.
German imports, exports surprisingly drop. Germany's trade surplus slipped to €18.5B in December from €18.9B in November but came in above consensus of €17.3B. Exports surprisingly fell 0.9% on month after four gains in a row, while imports dropped 0.6%. "With these numbers, the secret hope that fourth-quarter growth was actually better than suggested by the Statistic Office's first estimates are fading away," says ING's Carsten Brzeski. The preliminary estimate for German Q4 GDP is +0.25%.
Top Ideas: Movers and Great Calls
1) On January 28, Inefficient Market called networking specialist Lantronix (LTRX) an inexpensive play on the growing machine-to-machine communication market. Shares are +17.6% since. Read article »
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In Asia, Japan +2.2% to 14462. Hong Kong +1% to 21637. China +0.6% to 2044.5. India +0.3% to 20377.
In Europe, at midday, London flat. Paris +0.1%. Frankfurt +0.1%.
Futures at 6:20: Dow +0.2%. S&P +0.3%. Nasdaq +0.5%. Crude -0.4% to $97.46. Gold +0.2% to $1259.30.
Ten-year Treasury Yield flat at 2.71%.
Notable earnings after today's close: CCJ
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