10 things you need to know before the opening bell

Janet yellenREUTERS/Kevin LamarqueFederal Reserve Chair Janet Yellen takes her seat to testify at a Senate Banking, Housing and Urban Affairs Committee hearing on ‘Semiannual Monetary Policy Report to Congress’ on Capitol Hill in Washington, February 24, 2015.

Here is what you need to know.

Chinese manufacturing is expanding. HSBC Flash Manufacturing PMI climbed to 50.1 (49.7 previous), outpacing the 49.6 that had been forecasted. Today’s reading has the index back above the 50.0 expansion / contraction line and its best level in four months. China’s yuan weakened by 0.1% to 6.2599 against the dollar, and it’s near its weakest levels since October 2012.

Fed Chair Janet Yellen faces her second day of testimony on Capitol Hill. Yellen spent yesterday’s session in front of the Senate Banking Committee fending off questions about Fed policy and ‘Audit the Fed,’ and she’s likely to hear more of the same today as she appears in front of the House Financial Services Committee.

Hewlett-Packard warned for 2015. The company announced it expects non-GAAP earnings per share of $US0.84 to $US0.88 per share, which was well below the $US0.96 per share that analysts were looking for. As for the quarter, results were mixed. EPS of $US0.92 per share topped the $US0.91 per share that analysts expected while revenues of $US26.8 billion missed the forecasted $US27.2 billion.

Global stock markets are mostly lower. China’s Shanghai Composite (-0.6%) slid as traders returned to work following the extended Lunar New Year holiday. Meanwhile, Australia’s ASX (+0.3%) outperformed on the heels of some better than expected data. European markets are lower across the board with Italy’s MIB (-0.7%) pacing the decline.

US economic data is light. Weekly MBA Mortgage Application fell 3.5%. New home sales are due out at 10am ET and crude oil inventories will cross the wires at 10:30am ET. Treasury will hold a $US35 billion 5-year note auction at 1pm ET.

A judge has ordered Apple to pay $US533 million for infringing patents. A jury ruled Apple’s iTunes infringed on three of Smartflash’s patents. Reuters reports, “The jury, which deliberated for eight hours, determined Apple had not only used Smartflash’s patents without permission, but did so wilfully.” Apple will appeal the ruling.

JPMorgan will close 5% of it branches over the next two years. The announcement comes as part of a cost-cutting plan that aims to save the banking giant $US1.4 billion.

China is looking into ways to combat its property slowdown. Bloomberg reports, “The government could reduce down-payment requirements for second-home purchases,” or, “let homeowners sell properties without paying sales tax after two years, down from five years.

Britain’s BBA Mortgage Approvals topped estimates. The number saw a reading of 36.4K, topping the 63.2K that was expected. The British pound is up 0.2% at 1.5490, and nearing its best levels of 2015.

Brazil’s Petrobras was cut to ‘junk’ at Moody’s.The scandal-plagued energy giant saw its credit rating lowered to ‘Ba2’ from ‘Baa3.’ Moody’s explained in a statement, “These rating actions reflect increasing concern about corruption investigations and liquidity pressures that might result from delays in delivering audited financial statements, as well as Moody’s expectation that the company will be challenged to make meaningful reduction in its very high debt burden over the next several years.”

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