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Good morning. Here’s what you need to know.
- Asian markets were lower in overnight trading, with the Nikkei down 2.3 per cent and the Shanghai Composite down 1.4 per cent. European markets are in the red, led by Italy, down 4.6 per cent. In the United States, futures point to a positive open.
- Federal Reserve Chairman Ben Bernanke gives a semi-annual testimony on monetary policy before Congress this morning, starting at 10 AM ET. Markets will be listening closely to see if Bernanke will end the month on a dovish note following a spate of public discussions by other board members over concerns about the costs of monetary easing and a possible tapering of asset purchases.
- Markets are dealing with the fallout of yesterday’s Italian elections, in which Silvio Berlusconi and Beppe Grillo made surprising gains and will likely force a hung parliament scenario, which could then result in another election. The euro dropped 3 pennies yesterday but has bounced back a bit and is trading sideways. Morgan Stanley is out with a bearish note on the euro, telling clients to sell any rebounds.
- The British pound is moving sharply lower this morning after Bank of England deputy Governor Paul Tucker said he was open to more quantitative easing. Tucker also said the BoE has discussed the idea of negative nominal interest rates as well; i.e., banks charging depositors to hold their cash.
- Home Depot posted fourth-quarter earnings of $0.68 per share, ahead of estimates of $0.64 per share. Revenues rose to $18.25 billion, topping expectations of a smaller increase to $17.72 billion. The company also approved a $17 billion share buyback and hiked its shareholder dividend 34 per cent.
- Chinese regulators are preparing the first stages of a new crackdown on the shadow banking system, which will include provisions for extensive disclosures on off-balance sheet credit products created by banks and possibly a hard cap on the number of products that can be sold as a percentage of bank assets. The new rules will be tested in Shanghai starting in late March or early April.
- The FHFA House Price Index is due out at 9 AM ET. Economists predict that the index rose 0.6 per cent again in December after rising 0.6 per cent the month before. Also out at 9 is the Case-Shiller 20-City Home Price Index, which is expected to have risen 0.6 per cent in December after posting a 0.8 per cent gain in November.
- The latest Richmond Fed Manufacturing index reading is out at 10 AM ET. Economists expect the index to rise to -4 from -12 last month, indicating a somewhat less bad outlook for manufacturing in the Southeast region.
- Also out at 10 are January New Home Sales data. Economists expect sales to have risen 3 per cent after contracting 7.3 per cent in December.
- The final 10 AM data point is the Conference Board’s February Consumer Confidence survey. Economists expect the index to rise to 62 from last month’s 58.6 reading. Follow the releases LIVE on Business Insider >
- BONUS: Janet Jackson secretly married a Qatari billionaire.
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