Investors Holding Back Before Tomorrow's Economic Data
Today's financial recap and tomorrow's financial outlook.
The S&P 500 (INDEXSP:.INX) opened the day up a few points and, after a quick plunge in the opening minutes, finished near its highs of the day. Japanese markets were closed last night. Financials, materials, and tech stocks were the best performers today, while utilities lagged. Bank of America (NYSE:BAC) regained almost 2% in today's session after it lost more than 6% yesterday following its restatement of its capital ratios and suspension of its dividend and buyback program. Its refiled plan with the Federal Reserve would likely push for the dividend increase but abandon its buyback program.
Apple (NASDAQ:AAPL) sold $12 billion of debt in a seven-part offering. The order book for the deal was said to be in excess of $40 billion. The new debt will be used to fund the company's $30 billion expansion in its stock buyback plan and 8% increase in its quarterly dividend.
German engineering and manufacturing company Siemens AG (ETR:SIE) announced that it would make a bid for Alstom SA's (EPA:ALO) assets if it was given the proper time to perform due diligence on the company's books and management. General Electric (NYSE:GE) has already submitted a binding offer over the weekend, which Alstom prefers at present, but the French government has urged the company to entertain both offers. It was also reported that Siemens was exploring the purchase of Rolls-Royce's energy assets.
Twitter (NYSE:TWTR) reported earnings after the close, beating on EPS, revenues, and raising guidance for the full year and coming quarter. However, the subscriber growth did not beat analyst expectations strongly enough and the stock sold off in excess of 8% in extended trading.
Tomorrow's Financial Outlook
There are three significant events tomorrow that will drive what is likely to be a volatile day: the advance estimate of first-quarter US GDP, the ADP private payrolls report, and the policy statement from the FOMC. US GDP is expected to rise at a quarterly annualized rate of 1.2% in the first quarter, down from its 2.6% rate in the quarter prior. For April, private payrolls are expected to rise 210,000 after gaining 191,000 last month. And lastly, the Fed is expected to further reduce its monthly asset purchases by $10 billion to $45 billion and leave the language of its statement unchanged.
The regional Chicago purchasing manager index is also scheduled to be reported.
It will be equally busy in the rest of the world. Preliminary March Japanese industrial production is scheduled to be reported in addition to the advance manufacturing survey for April. Germany's retail sales report for March and employment change for April is also scheduled to be reported. Finally, and most importantly, the April eurozone consumer price index will be reported at 4:00 a.m. EDT. Today's German HICP inflation only rose 1.1% year-on-year, below the 1.3% expectations, which foreshadows a broader report that's below expectations. Eurozone CPI is expected to rise to a year-on-year rate of 0.8% from 0.5% last month.
Fifty-four major US companies are scheduled to report earnings tomorrow. Notable reports include Hess (NYSE:HES), International Paper (NYSE:IP), Yelp (NYSE:YELP), Tesoro (NYSE:TSO), Western Digital (NASDAQ:WDC), and MetLife (NYSE:MET).
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