The eight largest U.S. banks will have to hold another $68B in loss-absorbing capital after U.S. regulators voted to raise the "leverage ratio" to 5-6% of their total assets, well above the Basel III standard of 3%. The banks affected include JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS). The eight firms have until January 1, 2018 to comply with the new rule.
Illinois' House and Senate have approved a bill that would increase employee contributions to two Chicago city pension systems and which will cut future cost-of-living increases for retirees. The bill is an attempt to deal with a pension system that has a shortfall of around $20B, with some funds on course to run out of money within a decade.
Germany's exports fell 1.3% on month in February after rising 2.2% in January and missed consensus. Import growth slowed to 0.4% from 4.1% but was greater than expected, while the trade surplus surprisingly dropped to €15.7B from €17.3B and came in below forecasts. Germany has received criticism that its economy relies too much on exports at the expense of its European partners.
Crop growers across the nation have begun to assess the damage from the freezing temperatures and heavy snowfalls that the U.S. suffered this winter. "The worst thing is it may have damaged not just the buds but trees and vines, which would have a longer-term impact," says Ken Nye of the Michigan Farm Bureau.
Profits that major U.S. corporations have parked overseas in order to avoid taxes at home jumped 93% to $2.1T in 2008-2013, research firm Audit Analytics has calculated. GE (NYSE:GE) held the most amount of money abroad with $110B and Microsoft (NASDAQ:MSFT) was second with $76.4B, after which comes Pfizer (NYSE:PFE) with $69B, Merck (NYSE:MRK) with $57.1B and Apple (NASDAQ:AAPL) with $54.4B. The numbers have prompted fresh calls for an overhaul of the tax code.
Toyota has recalled 6.76M vehicles globally after the company found problems with the steering columns, wiring harnesses and seat railings in 1,058 autos. The recall, one of the largest ever in the auto sector, involves 27 Toyota (NYSE:TM) models, including certain Yaris, Urban Cruiser, RAV4 and Hilux vehicles. The action is Toyota's second major recall this year following one involving 1.9M Prius hybrids in February. Shares were -0.4% premarket.
Major companies have been working to overcome a critical security flaw in certain versions of the OpenSSL encryption tool that is used by up to two thirds of Web sites. The bug, called Heartbleed, has been around for two years and allows thieves to steal private user information unnoticed, including passwords and banking information. Companies that have commented on the problem include Amazon (NASDAQ:AMZN) and Yahoo (NASDAQ:YHOO).
Alcoa swung to a Q1 net loss of $178M from a profit of $149M a year earlier after it took $255M in charges related to cutting production in Brazil, and closing plants in Australia and New York. Revenue fell 6.5% to $5.45B and missed consensus, although adjusted EPS of $0.09 topped forecasts. Alcoa (NYSE:AA) predicted that global aluminum demand will exceed output this year, which would end a surplus of almost a decade. Shares rose 3.1% premarket.
Comcast has submitted a 180-page document to the FCC outlining why it should be allowed to acquire Time Warner Cable (TWC) for $45B despite major antitrust concerns. The filing comes ahead of hearings at the Senate Judiciary Committee today about the deal. Comcast's (NASDAQ:CMCSA) main argument is that it doesn't compete with Time Warner in any market in cable TV or in broadband.
The Weather Channel is returning to DirecTV after the latter agreed to a slight increase in carriage fees. DirecTV (DTV) had wanted a sharp cut and dropped the Weather Channel in January following a dispute over the payments. However, DirecTV had a change of heart after Hilton Worldwide (NYSE:HLT) reportedly insisted that the satellite-TV provider carry the Weather Channel as part of a deal in which DirecTV would become the hotel giant's "preferred" provider.
New York's Department of Financial Services has reportedly sent subpoenas to Chubb (NYSE:CB), CNA Financial (NYSE:CNA), Liberty Mutual and Navigators Group (NASDAQ:NAVG) as part of an investigation into the possible violations of sanctions against Iran. The NYDFS has requested information about marine-cargo policies that the insurers issued to Glencore Xstrata (OTCPK:GLCNF) in connection with its Iranian metals trade.
Hewlett-Packard is set to acknowledge today that it has engaged in "corrupt activities in Poland," the country's interior minister, Bartlomiej Sienkiewicz, has said. Poland's Central Anti-Corruption Bureau has cooperated with the FBI and SEC on the issue, Sienkiewicz said. H-P's (NYSE:HPQ) acknowledgement will come amid a major probe into bribes paid for IT contracts in the country.
La Quinta's shares are due to start trading on the NYSE today after the hotel chain's IPO raised $632M with a sale of 37.2M shares at $17 each, below a range of $18-21. La Quinta's (NYSE:LQ) market cap is $2.08B.
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In Asia, Japan -2.1% to 14300. Hong Kong +1.1% to 22843. China +0.3% to 2105. India +1.6% to 22702.
In Europe, at midday, London +0.8%. Paris +0.4%. Frankfurt +0.4%.
Futures at 6:20: Dow +0.2%. S&P flat. Nasdaq +0.3%. Crude -0.1% to $102.43. Gold +0.9% to $1310.40.
Ten-year Treasury Yield +2 bps to 2.71%.
Today's economic calendar:
7:00 MBA Mortgage Applications
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
1:00 PM Results of $21B, 10-Year Note Auction
2:00 PM FOMC minutes
3:30 PM Fed's Evans: "Stabilizing Financial Systems for Growth and Full Employment"
7:00 PM Daniel Tarullo speaks on Stabilizing Financial Systems for Growth and Full Employment
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