We could see significant action in a number of stocks this morning on both sides of the border. Facebook rallied in aftermarket trading after posting EPS of $0.77 way above the $0.62 street estimate. First Solar, on the other hand declined on news of an upcoming change in CEO. Symantec may come under pressure after surprising the street with next its CEO is stepping down, cutting guidance and postponing its analyst day.
In Canada today, Bombardier is in the spotlight once again after the company confirmed that it has won a big $5.6 billion order for 125 CSeries jets from Delta Air Lines (75 firm and 50 options). Potash, on the other hand, cold come under pressure after missing on earnings and cutting guidance. BCE beat the street.
Mixed earnings reports from big integrated oils may also attract attention today. Suncor’s results were worse than expected but the company boosted production guidance. ConocoPhillips results were not as bad as feared but the company cut capex spending again.
Overseas and forex trading overnight and this morning have been dominated by the swift and severe reaction to the Bank of Japan’s decision to maintain current interest rate policy to give it more time to assess how the recent introduction of negative interest rates is working. This was a hawkish surprise to the street as many traders had been looking for another big stimulus package. The news sent JPY soaring over 2% (which is a huge move in a day in forex, like a 20% move in a stock) against USD, CAD, EUR, AUD and other major currencies. The JPY rally crushed Japanese stocks sending the Nikkei down 3.6%.
Japan isn’t the only country to see its currency soar overnight. NZD has gained 1.6% against USD after the Reserve Bank of New Zealand maintained its overnight rate as well surprising some who had been hoping for a rate cut. The RBNZ left the door open to a future rate cut but didn’t say when and tried to talk down the dollar a bit but didn’t make any serious threats so the street took the statement as neutral and more hawkish than expected.
Meanwhile, yesterday’s FOMC announcement dropped concerns about overseas economies and financial markets and took a neutral tone leaving the door open to a June rate hike, and Brazil’s central bank held rates steady through the country’s political crisis. Overall, these decisions suggest that the recent cycle of monetary easing is winding down and that pendulum is starting to swing back in a less dovish direction toward neutrality at least. This change continues to take pressure off USD which could help to boost the earnings prospects for US exporters and multinationals in coming quarters.
There’s more news on the way that could move the markets today. In particular the first crack at US Q1 GDP may attract significant attention and could start to influence Fed June meeting speculation on US indices and USD.
Bombardier confirms major order for 125 CSeries aircraft from Delta Airlines (75 firm and 50 options) with a list price of $5.6B, deliveries start in 2018
Facebook $0.77 vs street $0.62 (wow!!), sales $5.38B vs street $5.26B, mobile 82% of revenue, plans to create a new class of shares.
Symantec cuts quarterly guidance to $0.22 from $0.24-$0.27, CEO to step down, replacement search starting, analyst day postponed
ConocoPhillips ($0.95) vs street ($1.05) cuts 2016 capex to $5.7B from $6.4B
Ford $0.68 vs street $0.48, sales $35.2B vs street $35.6B
First Solar sales $848M below street $959M, raises low end of full year EPS guidance to $4.10-$4.50, CEO stepping down to be replaced by CFO
Texas Instruments $0.65 vs street $0.62
Potash $0.15 vs street $0.16, guides next Q to $0.15-$0.25 below street $0.29, cuts full year guidance to $0.60-$0.80 from $0.90-$1.20
BCE $0.85 vs street $0.83
Suncor Energy ($0.33) vs ($0.25), raised 2016 production outlook to 620K-665K bbl/d from 525K-565K bbl/d
Bombardier ($0.03) vs street ($0.01)
Open Text $0.80 vs street $0.84, 15% dividend increase
Methanex ($0.27) vs street ($0.19)
Significant announcements released overnight include:
Bank of Japan decision no change to QE target expected
Bank of Japan policy rate (0.10%) no change expected
US FOMC interest rate 0.25%-0.50% no change as expected
NZ RBNZ cash rate 2.25% no change as expected
Brazil interest rate 14.25% no change as expected
Japan unemployment rate 3.2% vs street 3.3%
Japan consumer prices (0.1%) vs street 0.0%
Japan core CPI 1.1% vs street 1.0%
Japan retail sales (1.1%) vs street (1.4%)
Japan household spending (5.3%) vs street (4.1%)
Japan industrial production 0.1% vs street (1.6%)
Japan housing starts 8.4% vs street (0.6%)
Japan construction orders 19.8% vs previous (12.4%)
UK Nationwide house prices 4.9% vs street 5.0% and previous 5.7%
Germany unemployment chnge (16K) vs street 0K
Germany unemployment rate 6.2% as expected
Norway unemployment rate 4.6% vs street 4.8%
Norway retail sales (0.7%) vs street 0.4%
Sweden retail sales 1.9% vs street 3.5%
Greece retail sales (7.3%) vs street (2.0%)
Spain consumer prices (1.1%) vs street (0.7%)
Australia export prices (4.7%) vs street (1.5%)
Upcoming significant announcements include:
1:00 pm BST Germany consumer prices street 0.1%
8:30 am EDT US Q1 GDP street 0.7 vs previous 1.4%
8:30 am EDT US Q1 personal consumption street 1.7% vs previous 2.4%
8:30 am EDT US core PCE inflation street 1.9% vs previous 1.3%
8:30 am EDT US jobless claims street 259K
10:30 am EDT US natural gas storage street 70 BCF
11:00 am EDT US Kansas City Fed previous (6)
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