Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
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Mirroring Vladimir Putin, markets in Russia have shrugged off further Western bluster over Crimea. The Micex stock index was +0.9% at the time of writing despite the U.S. and other major countries expelling Russia from the G8 - which was expected anyway - and warning of more sanctions "that will have an increasingly significant impact on the Russian economy." The USD-RUB was -1.2% at 35.648 rubles.

German business optimism has eased this month amid the fallout from the Crimean crisis. The German Ifo institute's business climate index has slipped to 110.7 from 111.3 in February and missed consensus of 111. The current-situation reading rose to 115.2 from 114.4, while the expectations print slipped to 106.4 from 108.3. ING economist Carsten Brzeski reckons Germany's economy has entered the fast lane, but maintaining "maximum speed will not be an easy task."

House and Senate energy committees are due to hold hearings today over whether the U.S. should ease the restrictions on the export of liquefied natural gas. The issue has received heightened attention due to the Ukraine crisis, as allowing more exports would help Europe cut its reliance on Russian gas. However, opponents, which include Dow Chemical (NYSE:DOW), argue that increasing sales abroad would raise domestic prices.

The U.S. Court of Appeals in Washington is set to hear arguments today over whether Obamacare subsidies in the 36 states that haven't set up their own exchanges are illegal. So far, other courts have ruled that such subsidies are ok. However, if the government loses, says Ron Pollack of advocacy group Families USA, "the effort to expand insurance coverage in the vast majority of the states would pretty much be halted."

Venezuela's bolivar plummeted to 51.86 to the dollar on a new exchange that the government set up yesterday as part of an attempt to increase dollar supplies and tame the black market. The price of the dollar on the government's official exchange is 6.3 bolivars and 10.8 bolivars on a secondary exchange, although it's 57-58 bolivars on the black market. Plenty of companies have been hit by the volatility of the currency, including Weatherford (NYSE:WFT), a provider of equipment and services for energy production.

General Motors managers learned in May 2009 about black-box data that confirmed that the ignition-switch flaw in some of its cars was potentially fatal. However, GM (NYSE:GM) still publicly maintained until recently that it didn't have enough evidence of the defect. Toyota (NYSE:TM) was last week fined $1.2B for misleading customers and authorities about fatal flaws in its vehicles.

King Digital Entertainment, the developer of the "Candy Crush Saga" hit mobile computer game, is due to price an IPO today. King is offering 22.2M shares at $21-$24 each, which would give it a valuation up to $7.6B. However, investors are wary, due to King's (BATS:KING) reliance on one game, falling sequential revenues and Zynga's (NASDAQ:ZNGA) post-IPO woes. Still, SA author Dan Scott provides the bull case.

Disney has agreed to acquire top YouTube content provider Maker Studios for $500M up-front and as much as $450M in performance earn-outs. Maker receives 5.5B monthly video views via 380M YouTube channel subscribers. Disney (NYSE:DIS) said that the startup will also provide it with valuable data about how viewers watch online video.

The shutdown of the Houston Ship Channel on Saturday following an oil-barge spill is affecting Exxon Mobil's (NYSE:XOM) production at its huge Baytown refining complex. The company wouldn't disclose how large a drop in output it foresees, although it expects to meet its contractual obligations. Analysts aren't too concerned about the overall impact of the closure, due to ample inventories in the region.

Cloud-storage provider Box is looking to raise $250M in an IPO. During the fiscal year ending January 31, Box's revenue more than doubled to $124.2M, although it made a net loss of $168.9M. Box has 25M registered users, with 40% of the Fortune 500 and 20% of the Global 200 among its clients. Rivals include Dropbox and EMC's (EMC) Syncplicity unit. A late-2013 funding round valued Box at about $2B.

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Today's Markets:
In Asia, Japan -0.4% to 14423. Hong Kong -0.5% to 21732. China +0.05% to 2067. India -0.1% to 22055.
In Europe, at midday, London +1.1%. Paris +1.1%. Frankfurt +1.1%.
Futures at 6:20: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +0.3% to $99.89. Gold -1.6% to $1314.40.
Ten-year Treasury Yield - 1bps to 2.73%.

Today's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 New Home Sales
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
1:00 PM Results of $32B, 2-Year Note Auction
4:00 PM Fed's Lockhart: U.S. Economic Outlook
7:00 PM Fed's Plosser: Monetary Policy and Economic Outlook

Notable earnings before today's open: CCL, GIII, HDS, IKGH, MKC, NEOG, WAG

Notable earnings after today's close: FIVE, GERN, GEVO, GOMO, LNDC, PVH, SCS

See full real-time earnings coverage »

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