Good morning. Here’s what you need to know.
- Markets in Asia were mostly lower in overnight trading. The Japanese Nikkei fell 1.1 per cent and the Shanghai Composite fell 0.3 per cent. European markets are moving higher this morning, led by German stocks, which are currently up 1.2 per cent. In the United States, futures point to a positive open.
- Japanese Prime Minister Shinzo Abe warned that a 2-per cent inflation target – the key element of the new Japanese government’s plan to end more than a decade of deflation – may take more than two years to reach. The comments come at a time when the wild Japanese stock market rally that has commenced since Abe came into power in late 2012 has begun to stall out a bit.
- The number of unemployed persons in the euro zone rose to 19.071 million in February, the highest level on record. The unemployment rate was unchanged at 12 per cent. In Italy, the rate unexpectedly ticked down to 11.6 per cent from 11.7 per cent in January.
- Euro zone PMIs – monthly gauges of manufacturing activity – were decidedly negative in March. In Italy, the headline PMI index fell to 44.3 from 45.8 the month before. Meanwhile, in Spain, the index tumbled to 44.2 from 46.8. Any reading below 50 on the index indicates contraction; these numbers therefore indicate an intensifying recession in the euro zone periphery.
- The news was not much better out of the “core” euro zone. French PMI rose slightly – to 44.0 from 43.8 – but still remains at deeply contractionary levels. And in Germany, the economic cornerstone of the euro zone, PMI fell to 49.0 from 50.3 – slipping into contractionary territory for the first time this year.
- In the U.K., PMI rose to 48.3 from 47.9 in February, but remained in contraction mode and missed economists’ expectations for a rise to 48.7. Markit economists, who compile the survey, offered a bleak outlook for the U.K. economy thanks to continued weak manufacturing and bad weather in the first quarter of the year.
- Goldman Sachs analysts removed Apple from their “conviction buy” list after lowering their price target on the stock to $575 from $660. According to the analysts, “Key risks include delayed product cycles, supply chain difficulties, product price erosion, and a slower pace of product innovation.” Click here to see the 25 stocks that people are shorting like crazy >
- February factory orders data are due out in the U.S. at 10 AM ET. Economists predict orders rose 2.9 per cent in February after a 2.0 per cent contraction in January.
- March vehicle sales figures will be reported throughout the day today. Economists expect global auto makers to reveal sales of 15.3 million units at a seasonally adjusted annualized rate last month, down slightly from 15.33 million in February.
- Four Federal Reserve presidents will give public speeches today. Minneapolis Fed President Narayana Kocherlakota speaks at 1 PM ET, followed by Atlanta Fed President Dennis Lockhart at 1:30. At 7:30 PM, Chicago Fed President Charles Evans and Richmond Fed President Jeffrey Lacker will speak at an event together.
- BONUS: Heidi Klum helped save her son and his nanny from a riptide in Hawaii this weekend.
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