Greece avoids default with debt swap. Greece said €172B of bonds were tendered by private investors in its debt swap, making the participation rate 85.8%. The country intends to amend the terms of all Greek law governed bonds, bringing the participation rate to 95.7%. However, the country's activation of collective action clauses will likely force the ISDA's hand in declaring a "credit event," triggering payouts on CDS. The ISDA Determination Committee meets at 8 AM ET. Meanwhile, Morgan Stanley suggests the yield on Greece's new bonds could climb as high as 20% amid "material risks" related to the country's mass sovereign restructuring. One source says traders are already offering to buy and sell the potential new bonds at yields on 11-year securities of 22%.
U.S. jobs to notch gains. Aside from Greece, the big story of the day is likely to be nonfarm payrolls, which are expected to show employment grew solidly for a third month and added 210K jobs. The unemployment rate is expected to have held steady at a three-year low of 8.3%. However, according to Gallup measurements, unemployment rose to 9.1% in February from 8.6% previously (no seasonal adjustment), while underemployment (combining unemployed with those working part-time but wanting full-time work) rose to 19.1%. "Regardless of what the government reports, (these) measures show a substantial deterioration since mid-January."
Wal-Mart cleared on Massmart deal. Wal-Mart (NYSE:WMT) won the final go-ahead for its $2.4B acquisition of Massmart after a South African court dismissed an appeal from the government and unions. The ruling ended months of speculation about the future of the deal, which will speed Massmart's sub-Saharan Africa expansion and give Wal-Mart a strong presence in the region.
BofA in foreclosure side deal. Bank of America (NYSE:BAC) has reportedly struck a side deal with the government over foreclosures which will allow the bank to reduce its penalties in exchange for bigger reductions of mortgage balances. According to the WSJ report, BofA will avoid as much as $850M in penalties by giving over 200K borrowers the chance to sharply reduce their mortgage balances.
TI guides lower. Texas Instruments (NASDAQ:TXN) used its mid-quarter update to guide for Q1 revenue of $2.99B-3.11B ($3.02B-$3.28B prior) and EPS of $0.15-$0.19 ($0.16-$0.24 prior). The chipmaker cited unexpected weakness in wireless sales, largely related to its OMAP application processors, due to both customer demand and inventory issues. OMAP chips power the Kindle Fire (NASDAQ:AMZN) and Nook Tablet (NYSE:BKS), as well as Samsung's Galaxy Nexus. Shares -1% in AH trading.
Starbucks goes single-serve. Starbucks (NASDAQ:SBUX) announced its new Verismo single-cup coffee system, through which the company says it's targeting "global leadership" in the market. Starbucks will sell the Verismo in its stores, along with Starbucks-sourced coffee and milk pods. No details were provided about pricing and launch date. Starbucks partner and single-cup market leader Green Mountain Coffee (NASDAQ:GMCR) fell heavily in after-hours trading, though it pared its losses after Starbucks said its Verismo machine and pods will coexist with Green Mountain's Keurig brewers and K-Cups. SBUX +3.6% in AH trading. GMCR -15.8% premarket (7:00 ET).
Tensions rise in Spain. Spanish unions called a general strike for March 29 after failing to reach a deal with the government on labor reform. Meanwhile, Spanish website Expansion reports the European Commission has sent a team of experts to Spain to check its budget deficit data, though no details were provided as to the source of the report. (Spanish report, web-based translation)
Did Deutsche tap ECB money? Deutsche Bank (NYSE:DB) tapped the ECB's lending program last week for €5B-10B, sources say. If true, it's a bit of an embarrassment for the bank, which was one of the most outspoken critics of the social stigma that comes with using LTRO money, and which publicly prided itself on not participating in the ECB's earlier lending round. Shares -1% premarket (6:30 ET).
China growth slows. Several disappointing economic readings were announced by China this morning. Retail sales growth slowed to +14.7% in Jan.-Feb. from +18.1% in Dec. and short of +17.5% consensus. Factory output slowed to +11.4% in Jan.-Feb. from +12.8% in Dec. and below +12.4% consensus. Fixed asset investment slowed to +21.5%, somewhat better than the +20% consensus but the lowest level since 2002. Consumer inflation fell to +3.2%, a 20-month low, leaving room to further loosen monetary policy to support growth.
Household net worth improves. U.S. household net worth rose by $1.19T in Q4 to $58.5T, according to the Fed's latest flow of funds report, the first increase in 3 quarters. Rising stock prices and a somewhat-improving job market offset a $367.4B decline in the value of household real estate. Nonetheless, household debt rose 0.3% Y/Y after steadily falling for 3 years, and other forms of consumer credit rose 6.9%.
Boston Scientific bets on new defibrillator. Boston Scientific (NYSE:BSX) agreed to buy privately-held Cameron Health for $150M in cash and up to $1.2B in additional payments if the company's new kind of defibrillator achieves certain regulatory and sales milestones. The deal will have a 1 cent negative impact on BoSci's 2012 adjusted earnings.
Molycorp buys Neo Material. Molycorp (NYSE:MCP) agreed to acquire Canada's Neo Material Technologies (OTC:NEMFF) in a ~C$1.3B cash and stock deal that will give the rare earths miner access to Neo's rare earths processing capabilities and patents.
Major miss for Aussie trade balance. Australia posted a $713M trade deficit in January vs. expectations for a surplus of $1.59B as the Lunar holiday caused a sharp drop in exports to China and poor weather disrupted iron ore shipments. "We expect these to be temporary drops ... still, it does show the drawback of relying so much on the resource sector," said one economist.
UPS nears TNT deal. UPS (NYSE:UPS) and TNT Express are said to be near a merger agreement after initially rejecting a €4.9B ($6.5B) offer. Sources say the two sides are close to a deal on both price and conditions attached to the offer that may lead to job cuts and require divestitures to win antitrust approval. An announcement may come as soon as next week.
FCC eyes Verizon Wireless deals. The FCC has requested more info about the marketing agreements proposed in airwaves deals between Verizon Wireless (VZ, VOD) and several cable operators following competition complaints from rivals and public interest groups.
Dumping decision delayed. The U.S. Commerce Department delayed its decision on antidumping duties for Chinese solar-cell imports, saying a preliminary determination will be made May 17 instead of March 27. The postponement follows delays in the department's determination of countervailing duties in a case that has been "extraordinarily complicated."
Bill could boost tech IPO market. A bill being weighed by Congress would allow newly-public companies with less than $1B in annual revenue to avoid some of the more onerous requirements placed on publicly-traded firms by Sarbanes-Oxley for 5 years. Passage of the bill could lead to a pickup in tech IPO activity, which remains far below 1995-2000 levels even as many startups achieve $1B+ valuations.
In Asia, Japan +1.6% to 9930. Hong Kong +0.9% to 21086. China +0.8% to 2439. India +2.1% to 17503.
In Europe, at midday, London -0.1%. Paris flat. Frankfurt +0.2%.
Futures at 7:00: Dow flat. S&P -0.1%. Nasdaq -0.1%. Crude +0.25% to $106.85. Gold +0.15% to $1701.30.
Friday's economic calendar:
Monster Employment Index
8:30 Trade Balance
8:30 Nonfarm Payrolls
10:00 Wholesale Trade
Earnings Results: Companies that beat EPS expectations last night and this morning include Smith & Wesson (NASDAQ:SWHC).
Those that missed forecasts include Quiksilver (NYSE:ZQK).
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