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Economy
China's inflation slowed to an 18-month low of 1.8% on year in April from 2.4% in March and came in below consensus of 2%. Factory-gate prices (PPI) dropped for the 26th consecutive month with a decline of 2%. With other data indicating that China's economy is slowing down, economists attributed the fall in CPI to a weakness in demand. Today's data has increased expectations that the government will further ease monetary and fiscal policy.

Germany's exports fell 1.8% on month in March after dropping 1.3% in February and missed forecasts, with the crisis in Ukraine and China's slowdown weighing on the figure. Imports declined 0.9% and the trade surplus slipped to €14.8B from €15.8B. "With ongoing geopolitical problems and the slowing emerging economies, it looks as if Germany's famous export engine could still be sputtering for a while," says ING economist Carsten Brzeski.

Stocks
Advertising giants Omnicom and Publicis have called off their $35B merger, citing "difficulties in completing the transaction within a reasonable time frame." The news is not a surprise given that these difficulties had been well publicized. The problems between Omnicom (NYSE:OMC) and Publicis (OTCQX:PUBGY) included obtaining tax and other regulatory approvals, and differences over which executives would take leading positions, particularly the job of CFO.

Apple is reportedly nearing an agreement to pay $3.2B to acquire headphone maker Beats Electronics, which was founded by rapper Dr. Dre and music executive Jimmy Iovine. A deal would be the biggest in Apple's (NASDAQ:AAPL) history and represent a departure from the reticence that Steve Jobs showed for large purchases. It would also include Beats Music, a streaming service launched in January to compete with Spotify and Pandora (NYSE:P).

Hilton Worldwide's Q1 EPS of $0.13 beat forecasts by $0.04, while revenues grew 4.4% to $2.36B and topped consensus by $20M. Hilton's (NYSE:HLT) shares were +1.55% premarket.

CBS's Q1 net profit from continuing operations rose 6% to $468M and adjusted EPS of $0.79 topped expectations. However, revenue slipped 4.5% to $3.86B, due to the company broadcasting the highly lucrative Super Bowl in the comparable period in 2013 but not this year. Still, increased licensing fees from CBS's (NYSE:CBS) Showtime network helped the company offset the lack of major ad revenues that are generated by showing the Super Bowl.

Telefonica's Q1 earnings missed analyst expectations as net profit slumped 23% to €692M ($957.5M), hurt by forex turmoil in Latin America, declining revenues, and the divestment of the telecom carrier's Czech business last year. Sales fell 14% to €12.2B, with revenues in Spain, Germany and Latin America dropping sharply. Telefonica's (NYSE:TEF) shares were -2.8% in Madrid at the time of writing.

ArcelorMittal's EBITDA rose 12% to $1.75B in Q1 and met analyst expectations, while revenue edged up 0.2% to $19.79B. The steel giant's net loss narrowed to $205M from $345M a year earlier, with the latest figure affected by $1.08B in depreciation and amortization. "The prospects for growth in our core markets in Europe and the U.S. are encouraging and overall we remain cautiously optimistic," ArcelorMittal (NYSE:MT) CEO Lakshmi Mittal said. Notwithstanding that optimism, shares were -2.4% premarket.

Alcatel-Lucent's Q1 net loss narrowed to €73M ($101M) from €353M a year earlier, helped by lower costs and an 11% increase in revenue at the telecom-equipment company's Internet-routing division. Overall sales fell 3.3% to €2.96B, mainly because of the increase in the euro vs the dollar and a 50% fall to €99M at the firm's managed-services business. Still, Alcatel-Lucent (NYSE:ALU) swung to an adjusted operating profit of €33M from a loss of €179M and beat expectations for break-even. Shares were +1.2% premarket.

Fiat Chrysler Automobiles is set to be based in London when Fiat (OTCPK:FIATY) and Chrysler complete the merger of their operations, CEO Sergio Marchionne says. The U.K. capital represents something of a compromise between Michigan, where Chrysler is located, and Fiat's home country of Italy. And as Pfizer (NYSE:PFE) is well aware, the U.K. offers attractive tax benefits.


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Today's Markets:
In Asia, Japan +0.3% to 14200. Hong Kong +0.1% to 21863. China -0.2% to 2011. India +2.6% to 22926.
In Europe, at midday, London -0.3%. Paris -0.7%. Frankfurt -0.3%.
Futures at 6:20: Dow -0.1%. S&P -0.2%. Nasdaq -0.2%. Crude +0.7% to $100.96. Gold +0.1% to $1289.10.
Ten-year Treasury Yield -1 bps to 2.61%.

Today's economic calendar:
10:00 Job Openings and Labor Turnover Survey
10:00 Wholesale Trade
12:00 PM Fed's Fisher: Monetary Policy

Notable earnings before today's open: ALU, AMRN, ATRS, BECN, BLMN, BR, CLDT, CNQ, CQB, EBIX, ERF, GSM, HLT, HMSY, HZNP, MHR, MT, NRF, PGNX, RL, SATS, SIRO, SSYS, TTI

Notable earnings after today's close: VVC

See full real-time earnings coverage »

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Source: Wall Street Breakfast: Must-Know News