Futures are +50bps on the back of bullish global action in the Emerging Markets sector and stabilization of both the EUR and the GBP. The stabilization of European currencies indicates that the political situation in the
U.K. and the fiscal situation in are nearing resolution – or at least the perception of resolution. Both the GBP and the EUR are trading slightly lower, but have held relatively steady following yesterday’s move lower. Emerging markets surged to five-week highs overseas as India’s manufacturing output rose to the highest levels in over a year (and Templeton’s Mark Mobius made positive comments) and South Korea’s exports rose. Further, the Royal Bank of Australia (RBA) raised interest rates to 4% but indicated it would hold them steady for some time going forward. Additionally, Greece ’s unemployment rate unexpectedly dropped. In corporate news, M&A activity continues as CNBC reports that CF bids $47.40/share for Terra Industries. February vehicle sales are due for release today. Note the Bank of Canada left rates unchanged at 0.25%. Regarding Japan , CSFB posted a nice “trading summary” this morning: Greece
Rally this morning seems to be attributed to further optimism on the
Front. A rally in Greece gov'ts is raising spec that an aid package is soon to be settled. Our Credit team believes there is risk that the 10yr Greece CDS is constructing a "head and shoulders" reversal. A close below 261bps is needed to confirm, but if achieved, would add significant weight to the scenario the crisis is over. The 10yr Greece/Germany spread is also under pressure to tighten further. We think this would also relieve the immediate pressure on the EUR, as well as clear the way for a rise in 10yr EUR yields (Rise in the 10 yr EUR yield bc there has been a flight to safety within Europe in which the peripheral euro debt of spain, portugal, greece etc has been hammered in order to buy the relatively safer Euro debt). Greece
Much has been made of the markets’ indecision and 1050-1150 “trading range” of late. Recent anecdotal consumer spending channel checks indicate the past few weeks have been better than expected, which would indicate an uptick to consumer (and subsequently, investor) psychology. On the flip side (and following the “psychology” theme) difficulties in the sports world have caught my eye of late, primarily because “no sports” represents – again, anecdotally - a hidden psychological killer for the male 25-65 demographic. As columnist Michael Rosenberg recently wrote for CNNSI.com,
The economy is collapsing on the world of sports, and this bothers me far more than it should. …NFL commissioner Roger Goodell and Players Association president DeMaurice Smith are circling each other on a sumo mat and pounding their enormous chests. NBA owners want to get rid of long-term contracts and probably cut the value of maximum contracts. …Both the NFL and the NBA might shut down in 2011. A sports recession -- like sports heartbreak or sports celebration or sports anything, really -- is a cartoon version of the real thing. It shouldn't matter. There is no good reason to get upset about the empty seats at a Milwaukee Bucks game or baseball teams slashing payroll when good people are struggling to pay their rent and feed their kids. …And yet ... for some reason, the shrinking sports economy just adds to recession depression. It took me a while to figure out why. Part of it, of course, is that we need the diversion of sports more in bad times than in good, and the idea of a fall without NFL Sundays is not a happy one. But there is something else, too: Sports are supposed to be trouble-free. Americans want to believe in Happily Ever After -- that you can get the girl (or guy) and the beautiful home with the manicured lawn and then the credits roll. I think we have come to like the absurd fantasyland of sports. … Sports are still supposed to be the place we go to get away. It's a shame that our economic problems follow us there.
QCOM last night announced $3B buyback and dividend raise. UBSS ups DELL. DPZ beats by 5c and beats on revs. BofAMLCO cuts CFX. BMOC ups CNK. CTB reports better than expected. UBSS ups AEG. AIB higher on earnings. AMSF lower on earnings. BPI beats by 10c. UNFI earnings miss estimates by 1c. FDP earnings beat estimates. GBE upped at JMPS. IBKKC announces $300M offering. GSCO cuts KMB. LHO announces 5.35M share offering. LUX lower on earnings. MDR lower on earnings. STFL ups MDTH. UBSS cuts MU. NTRI down over 10% on earnings. TWPT cuts NUHC on termination of XLNX agreement. PNNT announces 5M share offering. BofAMLCO cuts PUK on the back of the AIG AIA deal. RGC upgrade at BMOC. BofAMLCO cuts RVBD. SPLS misses by 1c and trades lower. CITI ups TKS. TNS beats by 2c. TRA higher on CF bid. TRW announces 11M share offering. TTM trades higher on February sales. HSBC ups FMX. UBSS ups SNDK. GSCO cuts GAME.
S&P 500 PreMarket 8:30am (last/% change prior close/volume):
STAPLES INC 24.20 -6.42% 445875
QUALCOMM INC 36.75 +3.35% 1007970
KIMBERLY-CLARK 59.47 -2.11% 15789
JDS UNIPHASE 11.54 +2.03% 5675
CARNIVAL CORP 36.80 +1.94% 2400
DELL INC 13.83 +1.92% 152488
ANALOG DEVICES 30.39 +1.91% 1000
COGNIZANT TECH-A 51.44 +1.9 % 200
IAC/INTERACTIVEC 23.50 +1.86% 200
AK STEEL HLDG 22.62 +1.75% 3400
Today’s Trivia: What nation – indicated by this flag – celebrates its Independence Day today? And from whom did it gain independence?
Yesterday's Answer: Frederic Chopin’s 200th birthday was yesterday – he was born March 1, 1810.
By Anchalee Worrachate and Anna Rascouet
March 2 (Bloomberg) --
is under no pressure to sell bonds and will do so when market conditions are “favorable,” Greece
said Petros Christodoulou, head of the country’s debt management agency.
“We do not have to access the market any time soon,” he said in a telephone interview today. “But that doesn’t mean we will not. We will get into the market when conditions are more favorable for the benefit of the
and our investors.” Hellenic Republic
Investor concern about Greece’s ability to finance its debt, set to become the European Union’s largest this year, pushed the risk premium on Greek bonds to an 11-year high in January. The government faces more than 20 billion euros ($27 billion) in maturing debt in April and May, prompting speculation that European allies led by
Germany might extend aid to . Greece
Prime Minister George Papandreou is due to meet German Chancellor Angela Merkel on March 5 and German lawmakers have said that euro-area officials are devising a plan to grant Greece about 25 billion euros in aid. Greece has put off a planned 5-billion euro bond sale due as soon as this week in hope that more evidence of EU backing for Greece would lower its financing costs, the Guardian newspaper reported today.
The premium investors demand to buy 10-year Greek bonds over comparable German debt fell 3 basis points to 313 basis points today. That’s down from a post-euro record of 396 basis points on Jan. 28. Greek 10-year government bonds stayed near a two-week high today and the yield fell to 6.22 percent, the lowest since Feb. 12.
“They are waiting for things to calm down and for the spreads to tighten back in and they don’t have to give the market such a big concession,” said Michael Leister, a fixed- income strategist at WestLB AG in
. “For the time being, the market has taken their comments that they’re not under pressure quite favorably.” Dusseldorf, Germany
EU Monetary Affairs Commissioner Olli Rehn yesterday urged
to quickly outline new ways to cut the region’s largest budget deficit. Greece needs to raise about 10 billion euros this year, about a fifth of its total financing needs, to cover the shortfall, which reached 12.7 percent of gross domestic product last year. Papandreou’s government pledged to trim the shortfall to 8.7 percent this year. Greece
“I want to encourage the Greek authorities to consider and announce additional measures in the coming days,” Rehn said on a visit to
yesterday. “Given that risks related to macroeconomic and market developments are materializing, additional consolidation measures are necessary.” Athens
Papandreou addresses his governing Pasok party at 5 p.m.
local time today and the cabinet meets tomorrow to discuss further “decisions on the economy,” the government said yesterday. Greek newspapers have reported that Papandreou is preparing additional budget-reduction measures that may include wage cuts for civil servants and higher sales and tobacco taxes.” --BBERG news