U.S. averages are set to close out a roller-coaster first quarter at 2016 highs following a big reversal this month that propped up stocks. With Q1 earnings on tap, oil market volatility, interest rate decisions, and global growth worries, traders have a lot on their plate for determining the future path of the market. Bearing that in mind, where are we headed for the rest of 2016?
Investors are also tracking moves after the dollar hit a six-week low against the euro, weakening in the wake of recent dovish comments from U.S. Fed Chair Janet Yellen. But it's not just the euro that's making gains against the USD, Asian currencies are also getting a big boost. The Australian and New Zealand dollar are near nine-month peaks, while the Malaysian ringgit has climbed to a new seven-month high against the greenback.
Consumer prices in the euro-area remained in negative territory in March, weighed down by a sharp fall in the energy sector. Eurostat's flash estimate showed annual inflation of minus 0.1% against the previous month's reading of negative 0.2%. The disappointing figure comes despite an ECB decision this month to launch an even bigger bazooka of stimulus measures to fire up the eurozone economy.
Argentina has given the green light to a landmark deal to repay its holdout creditors, ending a 14-year legal battle that made the country a global financial pariah. The vote signifies the cornerstone of new President Mauricio Macri's plan for revitalizing an economy hobbled by low investment, high inflation and precarious central bank reserves, and will see Argentina issue its first bonds since 2001.
While technical issues would need to be discussed at Geneva peace talks, a new government that includes opposition, independents and loyalists could be agreed, said Syrian President Bashar al-Assad, according to Russia's RIA news agency. Opposition negotiators immediately dismissed his remarks, saying that a political settlement could only be reached by establishing a transitional body with full powers, not another government under Assad.
State-controlled newspaper Rodong Sinmun is warning North Koreans to prepare for economic hardships ahead as the nation channels funding into its weapons program. "The path to the revolution is never easy, we might have to go through Arduous March again - in which we only had to eat roots of the grass - and we might have to fight against our enemies all by one's self." The article comes as the U.N. enforces tough new sanctions on the country in the aftermath of Pyongyang's fourth nuclear test in January, and a rocket launch in February.
India hopes to receive one of the first loans issued by the China-led Asian Infrastructure Investment Bank later this year, as it looks to raise $500M for solar power projects from the newly created lender. The AIIB, which has authorized capital of $100B, plans to join global clean-energy initiatives, and could fund eco-friendly investment projects to avoid allegations of promoting pollution.
MSCI is resuming discussions on including Chinese mainland-listed shares in its Emerging Markets Index (ETF: EEM), though it expressed concern about barriers to investment. The move would be a coup for the country, and potentially bring billions of dollars into Chinese shares from funds that passively track the index. Mainland markets rallied around 50% in the first half of 2015, but slumped over 30% from mid-June after MSCI decided not to include A-shares in its benchmark. Despite the overnight news, S&P cut its rating outlook on China to negative.
Google CEO Sundar Pichai was handed a pay package valued at $100.5M early last year, even before he was elevated to become chief executive of the world's biggest internet business. The Indian-born engineer took over as head of Google (GOOG, GOOGL) last October, when the tech giant recast itself as the holding company Alphabet and split its different businesses into freestanding units. Almost all of Pichai's pay is in the form of restricted stock, with the latest award vesting over a period of four years.
Embroiled in a proxy fight with Starboard Value, Yahoo (NASDAQ:YHOO) has joined the long list of companies implementing proxy access, which makes it easier for longtime shareholders to nominate a director to its board. In a new securities filing, Yahoo said it amended its bylaws to allow a stockholder, or group of as many as 20 investors, holding at least 3% of its shares continuously for three years to include board member nominees on its annual proxy statement.
IBM will announce today it has reached a deal to acquire Bluewolf Group, a consulting firm that helps businesses use Salesforce and other cloud software applications. Terms of the deal will not be disclosed, but according to Re/code, IBM is paying slightly more than $200M. The acquisition also marks the latest in a string of cloud-focused acquisitions by Big Blue. In January it acquired video hosting service UStream, and late last year it paid more than $2B for digital assets of the Weather Company.
Microsoft has outlined plans to put an array of artificial intelligence at the center of its future technology. "Bots are the new apps. Digital assistants are like...the new browsers, and intelligence is infused into all your interactions," CEO Satya Nadella said at the company's annual Build conference in San Francisco. The drive follows an embarrassing miscue last week when a Microsoft (NASDAQ:MSFT) chatbot spewed racist comments on Twitter (NYSE:TWTR). The rogue bot, called Tay, was mistakenly released briefly for a second time on Wednesday.
After months of talks that would transform France's telecoms sector, Bouygues (OTC:BOUYY) has delayed a €10B decision on whether to sell its telecom business to Orange (NYSE:ORAN), stating that talks "had not progressed sufficiently." The Paris-based conglomerate has now set a weekend deadline to make "a final decision" about the merger plan, which would cut the number of French mobile operators from four to three.
A major SIFI win for MetLife...A federal court judge has struck down the U.S. government's determination that the insurer is "too big to fail." MetLife (NYSE:MET) had argued that the Financial Stability Oversight Council used a secretive and flawed process in 2014 when it designated the company as a systemically important financial institution. Treasury officials suggest they are ready to appeal the ruling.
Chipotle has filed a trademark application for the term "Better Burger," according to some USPTO sleuthing by Bloomberg's Leslie Patton. A new restaurant concept would add to the company's group of small chains, including ShopHouse Southeast Asian Kitchen and Pizzeria Locale. The string of illnesses linked to the restaurant in the second half of the year may also have forced Chipotle (NYSE:CMG) to rethink its idea of freshness.
Two mosquito species that carry the Zika virus may inhabit a wider range of North America than previously thought. A new study published in the New England Journal of Medicine shows the potential range of the Aedes aegypti mosquito blanketing the southern U.S. and reaching as far north as San Francisco, Kansas City, and NYC. The likely extent of another Zika-carrying mosquito species, Aedes albopictus, stretches across the Southwest and covers most of the eastern U.S., including northern New England, according to a study by the CDC. Related tickers: SNY, INO, AEMD, XON, CEMI, BCRX, TMO, OTCQB:GOVX
How many job cuts are hitting Boeing? Yesterday, the planemaker acknowledged plans for 4,000 layoffs at its commercial airplanes division by mid-year, but sources say the company's broad goal is to slash jobs by 10% at the unit, which has about 80K employees. Although the reductions are part of a broad cost-cutting drive to keep the firm competitive, Boeing's (NYSE:BA) stock posted the biggest decline in the Dow Jones on Wednesday, falling 1.8% to $128.57.
Tesla has received its first pre-order for its Model 3 in Australia, the first market to begin selling its highly anticipated mass-market EV. An overnight tweet from Elon Musk: "Tomorrow is Part 1 of the Model 3 unveil. Part 2, which takes things to another level, will be closer to production." Despite yesterday's Electrek leak that described some of the car's specs, many are still waiting to see what will be included with the vehicle's basic configuration. Supercharging? Autopilot? Other bells and whistles? TSLA +0.5% premarket.
A U.S. jury on Wednesday found that General Motors (NYSE:GM) sold cars with defective ignition switches, although the accident at the center of the case wasn't caused by the faulty device. The legal victory of sorts for GM was the first trial to reach a verdict since the company recalled millions of vehicles with the part, and could help the automaker in some of its other pending cases across the nation.
Takata has denied calculating the estimated costs of a global recall for its potentially faulty air bag inflators, after a Bloomberg report claimed the supplier could face $24B in costs under a worst-case scenario. Takata (OTCPK:TKTDY) also added that it was difficult to determine costs at the moment, given that investigations into the cause of its exploding inflators were still underway.
Fiat Chrysler is talking with many players outside the car sector about possible collaboration, Chief Executive Sergio Marchionne said, and is keeping an open mind on what the possibilities might be. Auto technology has become a prime area of interest for Silicon Valley companies including Apple (NASDAQ:AAPL), which Fiat's (NYSE:FCAU) Marchionne said earlier this month should collaborate with carmakers to make a vehicle rather than trying to go at it alone.
In Asia, Japan -0.7% to 16758. Hong Kong -0.1% to 20776. China +0.1% to 3004. India flat at 25342.
In Europe, at midday, London -0.7%. Paris -1.3%. Frankfurt -0.8%.
Futures at 6:20, Dow -0.1%. S&P -0.2%. Nasdaq -0.1%. Crude -0.9% to $37.96. Gold +0.6% to $1235.70.
Ten-year Treasury Yield -2 bps to 1.81%
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Gallup Good Jobs Rate
9:30 Fed's Evans: U.S. Monetary Policy
9:45 Chicago PMI
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
4:30 Money Supply
4:30 Fed Balance Sheet
5:00 PM Fed's Williams Speech