Ahead of the market open on Thursday, here is what you need to know.
Netflix shares surge after earnings.The company announced earnings of $US0.77 per share, when adjusted for foreign exchange, versus the consensus estimate of $US0.69. Meanwhile, revenues climbed 23.9% to $US1.57 billion, matching analyst expectations. Notable was the jump to 62.30 million subscribers, which outpaced the 61.44 million that analysts were hoping for. The company is hoping to receive shareholder approval to split the stock.
German Finance Minister Wolfgang Schaeuble said “nobody expects that there will be a solution” on Greece. Expectations are low Greece can reach a deal with its creditors at next week’s Eurogroup meeting. HSBC has previously stated May 12 is a possible date for default. Greece’s 3-year yield is at a multi-year high, up 359 basis points at 27.77%.
Japan is the largest holder of US Treasury securities. Japan reclaimed the title as the largest holder of US debt, which it last held in 2008. China fell from the top spot as its holdings slipped 1.2% to $US1.22 trillion. “China’s decline was a bit larger, allowing Japan to jump into the top spot, $US700 million above China,” noted Reuters. Japanese holdings fell 1.1%. The Japanese yen is stronger by 0.1% at 119.00 per dollar.
Australia’s jobs report outpaced estimates. The Australian economy added 37,700 jobs in March, far outpacing the addition of 15,000 jobs that economists were expecting. The better than expected report also saw the unemployment rate ease to 6.0%, from the 6.2% in February. Australia’s dollar is up 1.3% at .7785.
Former Fed Chairman Ben Bernanke has accepted an advisor role at a hedge fund. Bernanke will join Citadel Investment Group as a senior advisor. The New York Times reports Bernanke chose Citadel because it “is not regulated by the Federal Reserve and I won’t be doing lobbying of any sort.”
McDonald’s is closing a bunch of restaurants in Japan. The operator of McDonald’s in Japan announced it would close 131 restaurants and renovate of 2,000 more as part of its restructuring plan. The company expects to take 38 billion yen ($US318.8 million) net loss for the year.
China’s foreign direct investment ticked higher. China’s foreign direct investment gained 2.2% in March, versus last year. The uptick brings the year-to-date advance to 11.2% when compared to the first quarter of 2014. On the other hand, inbound FDI climbed just 1.7% in 2014, making for the weakest growth in three years. Reuters notes, “That weak performance accentuated a cooling economy which is spurring more Chinese firms to plow money into overseas assets – a trend that could soon overtake inbound investment.” China’s yuan edged up 0.1% to 6.1969 per dollar.
Phillip Morris beat on the top and bottom lines. The company announced earnings of $US1.16 per share, topping the $US1.01 that analysts were anticipating. Revenues, excluding excise taxes, jumped $US6.62 billion, outpacing the $US6.13 billion that was expected.
Global stock markets trade mixed. China’s Shanghai Composite (+2.7%) led the advance in Asia while Germany’s DAX (-1.5%) paces the decline in Europe.
US economic data is heavy. Building permits, housing starts and unemployment claims are all scheduled to be released at 8:30 a.m. ET. Data concludes for the day with the Philly Fed Manufacturing Index at 10 a.m. ET and natural gas storage at 10:30 a.m. ET. The US 10-year yield is down 2 basis points at 1.87%.
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