Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Greece is reportedly raising €3B ($4.15B) in five-year bonds in the country's first auction of long-term paper since it was initially bailed out in 2010. Demand was for €20B ($27.7B) of notes, helping to push the yield down to just 4.95% from an initial pricing of 5-5.25%. The bond sale comes two years after Greece defaulted and suffered the biggest sovereign-debt restructuring in history.

Back in the real world of the debilitated Greek economy, the country remains mired in deflation. CPI fell 1.3% on year in March after dropping 1.1% in February, with consensus -1.1%. Unemployment declined to 26.7% in January from 27.2% in December.

Chinese exports tumbled 6.6% on year in March, which represented an improvement from an 18.1% plunge in February, although consensus was for growth of 4%. Imports slumped a worse-than-expected 11.3%, while the trade balance swung to a surplus of $7.71B from a deficit of $22.98B. Economist Hu Yifan says that "investors don't have to be worried" about the numbers, as the export declines were partly due to artificially high data a year earlier and the severe winter in the U.S.

Asian shares mostly rose today but European equities and U.S. stock futures were mainly lower at the time of writing. A Hong Kong-China bourse link-up (see below) and dovish FOMC minutes have provided support, but the far worse-than-expected Chinese trade data has dragged on sentiment. The FOMC minutes showed that policy makers are not necessarily committed to hiking rates in H1 2015 and that they're not overly enthused about providing calendar-based guidance.

BlackBerry CEO John Chen plans to reduce the company's reliance on handsets, but if he can't return the business to profit, he'd consider selling it. "I don't have a plan to get rid of handsets, I have a plan to not be dependent on handsets," Chen told Bloomberg. To Reuters, he said, "If I cannot make money on handsets, I will not be in the handset business." Chen also said that BlackBerry's (NASDAQ:BBRY) timeframe for a decision is short.

Ally Financial's shares are due to debut on the NYSE today after the auto-financing company priced its IPO at $25 a share, the low end of a range of $25-28 and good for a market cap of $12B. The Treasury raised $2.38B by selling 95M shares, giving it a handy profit - the government needed to raise $1.9B to break even on the bailout of Ally (NYSE:ALLY).

Chevron expects Q1 earnings to come in lower than the previous quarter, due to high currency conversion costs and one-time charges at the company's mining unit. Excluding the charges, results should be "comparable" with Q4, when Chevron (NYSE:CVX) reported net income of $4.93B, or $2.57 a share; the Q1 consensus estimate is $2.78. Downtime has harmed production, partly due to adverse weather across multiple regions.

China intends to connect the Hong Kong and Shanghai stock bourses and enable total cross-border trading of 23.5B yuan ($3.8B) a day. The plan is part of China's attempts to liberalize its economy, with Premier Li Keqiang saying it will "further improve the opening and healthy development of capital markets in China and Hong Kong." News of the plan helped Chinese and Hong Kong stocks rise despite the weak Chinese trade figures.

PC shipments fell 4.4% on year to 73.4M units in Q1, IDC estimates, after declining 5.6% in Q4 and 7.6% in Q3. Gartner reckons shipments only fell 1.7% to 76.6M in Q1. IDC chalks up the narrower drop to healthy commercial demand, as buyers purchased Windows 7 systems ahead of Microsoft's (NASDAQ:MSFT) termination of Windows XP support. The firm also thinks slowing tablet growth helped out.

Tesla Motors intends to begin selling its electric cars in China this month, with spokesman Simon Sproule saying that CEO Elon Musk will "personally" do customer deliveries. Musk reckons that China can be Tesla's (NASDAQ:TSLA) largest market, although Barclays analyst Brian Johnson retains some skepticism. "While we expect strong initial interest from early adopters in China...we see challenges to broader luxury market adoption," Johnson wrote this week.

Star designer Jony Ive, already in charge of Apple's (NASDAQ:AAPL) hardware and human interface design, will "soon completely subsume Apple’s software design group," 9to5 Mac reports. VP Greg Christie, who was in charge of software design, will leave Apple. Recent media articles highlighted the major role Christie played in the iPhone's creation.

Vodafone has agreed to acquire an 11% stake in its Indian unit held by partner Piramal Enterprises for 89B rupees ($1.48B). The transaction is part of Vodafone's (NASDAQ:VOD) plan to obtain 100% control of the subsidiary for a total of 101.41B rupees. The U.K. company owns 84.5% of Vodafone India directly and indirectly. Vodafone also intends to purchase the holding of another minority investor, businessman Analjit Singh.

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Today's Markets:
In Asia, Japan flat at 14300. Hong Kong +1.5% to 23187. China +1.4% to 2134. India +0.1% to 22715.
In Europe, at midday, London flat. Paris -0.3%. Frankfurt -0.4%.
Futures at 6:20: Dow -0.3%. S&P -0.3%. Nasdaq -0.3%. Crude -0.2% to $103.40. Gold +1.1% to $1323.20.
Ten-year Treasury Yield - 4bps to 2.66%.

Today's economic calendar:
Chain Store Sales
8:30 Initial Jobless Claims
8:30 Import/Export Prices
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
11:50 Fed's Evans: "Central Banking After the Great Recession"
1:00 PM Results of $13B, 30-Year Note Auction
2:00 PM Treasury Budget
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: CBSH, FDO, IGTE, PIR, RAD, SJR, TITN

Notable earnings after today's close: NQ

See full real-time earnings coverage »

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