China’s central bank fixed the yuan 0.56% higher to give the currency its largest one-day appreciation since the historic revaluation. The People’s Bank of China set the midpoint of the yuan trading range at 6.4589 to the U.S. dollar. Economists think the strong fixing was triggered in part by inaction from the Federal Reserve. Market reaction to the move has been somewhat mild, with the Shanghai Composite Index and Hang Seng Index both retreating only slightly, while Japan’s market is closed due to a national holiday. European stocks are lower almost across the board with fresh Eurozone economic data out for investors to digest.
In Asia, Japan closed for holiday. Hong Kong -1.6% to 21037. China -0.3% to 9569. India +0.1% to 25617.
In Europe, at midday, London -0.5%. Paris -1.3%. Frankfurt -0.8%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq flat. Crude +0.9% to $46.46. Gold +0.9% to $1277.20.
Ten-year Treasury Yield +1 bp to 1.84%
Friday’s Key Earnings
Outerwall (NASDAQ:OUTR) +8% with the bottom line improved.
Western Digital (NASDAQ:WDC) -4% after missing on both lines of its report.
Baidu (NASDAQ:BIDU) +6% after revenue popped 31%.
SkyWest (NASDAQ:SKYW) +9% with profit soaring.
Groupon (NASDAQ:GRPN) +4% after boosting EBITDA guidance.
LinkedIn (NYSE:LNKD) +12% after a stronger-than-expected report.
Pandora (NYSE:P) +6% with listening hours on the rise.
- Major economies in Europe are showing some firming up as they stay on the slow road to recovery.
- The unemployment rate in Italy fell to its lowest level in over four years during March as the economy continued to grow. The jobless rate fell to 11.4% to beat the consensus estimate of analysts of 11.6%. GDP in Italy rose 0.3% in Q1.
- A bounce in consumer spending in France helped GDP expand to 0.5% in Q1, to top estimates for 0.4% growth.
- Meanwhile, Spain is expected to hit its target of 1.5% growth in Q1. Eurozone Q1 GDP rose 0.6% vs. 0.4% expected. The GDP mark was 1.6% higher than a year ago.
Oil prices are higher in early trading after yesterday’s report by the U.S. Department of Energy showed a decrease in domestic crude production. Some analysts think the recent strong gains in oil will be capped soon with a sustainable rise in OPEC production around the corner, while other maintain undersupply will be the theme in the second half of the year. WTI crude trades at a six-month high of $46.46 per barrel at last check.
Legislators in China passed a law that will give the police broad powers to monitor foreign nonprofits. The new law is consistent with an increased push by President Xi Jinping to limit foreign influence on Chinese culture. The Obama administration reacted swiftly to the development by issuing a statement condemning the action.
Anheuser-Busch InBev has offered to sell more of SABMiller’s (OTCPK:SBMRY) European brands to appease European Commission regulators. The sale of Anheuser-Busch (NYSE:BUD) beer assets in Hungary, Romania, the Czech Republic, Slovakia, and Poland could generate as much as $5B, according to Exane BNP Paribas. The rights to Pilsner Urquell outside of the U.S. are included in the offloading. Potential buyers of the beer brands include Carlsberg (OTCPK:CABGY) and Heineken (OTCQX:HEINY).
The French government ordered eight automakers to develop plans to cut emission levels for models that failed testing. Environment Minister Ségolène Royal named Renault (OTC:RNSDF), Fiat Chrysler Automobiles (NYSE:FCAU), Mercedes-Benz (OTCPK:DDAIF), Volkswagen (OTCPK:VLKAY), PSA Peugeot Citroen (OTCPK:PEUGF), Nissan (OTCPK:NSANY), Opel (NYSE:GM), and Ford (NYSE:F) as the automakers in the spotlight. Royal warned that manufacturer sales could be suspended if the emissions improvements aren’t adequate.
Apollo Education Group disclosed that it doesn’t have enough votes on the books yet to approve the company’s planned sale to a consortium of investors. 58% of the Class A votes in so far are in favor of the deal. A special shareholder meeting was adjourned until May 6 to give shareholders more time to vote. Earlier this week, Apollo (NASDAQ:APOL) warned it could face “serious consequences” if the merger doesn’t go through.
CBS has been planning for life after controlling shareholder Sumner Redstone, Reuters reported, saying the company’s been visiting with investment bankers in an effort to see how it might secure control for its CEO, Les Moonves. Redstone – 92 and facing a high-stakes trial regarding his mental competence – holds voting control of CBS (NYSE:CBS) and Viacom (VIA, VIAB) through holding company National Amusements, but if he dies or is incapacitated, his interests pass to a seven-member trust that includes his daughter Shari as well as Viacom chief Philippe Dauman.
Caterpillar said it would close five plants in the U.S. and cut about 820 jobs, the latest in its moves to trim production amid falling demand. Last fall, Caterpillar (NYSE:CAT) outlined a strategy to slim its workforce by some 10,000 positions and shutter some 20 facilities over the next three years; it’s cut about 5,300 positions so far.
Amazon is up 4.5% in premarket action after the company topped Q1 estimates and issued solid guidance. Powering the EPS beat was the Amazon Web Services business, which churned up $2.57B in revenue and $604M in operating profit during the quarter. Amazon (NASDAQ:AMZN) expects Q2 revenue of $28B-30.5B, a range which compares favorably to the consensus estimate of $28.33B.
Ford says it will idle an F-150 plant in Kansas City for a week to address a couple of issues that have prevented the facility from running at full production capacity. Yesterday, Ford (F) reported record profit for Q1, with strong demand in North America for the F-150 providing a major boost.
TiVo moved up in after-hours trading Thursday after a surprise postponement of an earnings call from Rovi (NASDAQ:ROVI) spurred hopes that a rumored buyout of TiVo (NASDAQ:TIVO) was arriving. Sources told Bloomberg that a sealed deal to buy TiVo at a 10% premium was near, and could be announced as soon as Friday. Rovi moved its call to 8 a.m. today – just enough time to finalize communications around an acquisition, if it’s got the signatures.
The U.S. Air Force awarded an $82.7M contract to Elon Musk’s SpaceX to launch a satellite in 2018 to support the Global Positioning System used by the military and consumers for navigation. The head of the Space and Missile Systems Center says the Air Force will save 40% compared with what United Launch Alliance has been charging, as SpaceX’s most significant military contract yet breaks the monopoly that ULA partners Lockheed Martin (NYSE:LMT) and Boeing (NYSE:BA) have held on military space launches for more than a decade.
Unionized workers at Freeport-McMoRan’s El Abra copper mine in Chile say they have accepted a wage contract offered by the company. Tensions between Freeport-McMoRan (NYSE:FCX) and the union have been high since the company scaled back El Abra’s operations last year and laid off 650 workers.
U.S. Steel accused Chinese government hackers of stealing proprietary methods for making lightweight steel in a bid to boost Chinese steel producers seeking to supply a bigger share of the U.S. auto-making market. In a complaint filed earlier this week with the International Trade Commission, U.S. Steel (NYSE:X) said a computer belonging to a Pittsburgh researcher was hacked in 2011, and that plans for developing new steel technology were stolen.