Here is what you need to know.
China cut its reserve requirement ratio. The People’s Bank of China lowered its reserve requirement ratio 50 basis points to 17% for the country’s biggest lenders. The announcement comes as the PBOC looks for ways to ignite the slowing Chinese economy. China’s last reserve requirement ratio cut came in October.
China expects to lay off 1.8 million coal and steel workers. The slowdown in China is expected to cost 1.8 million coal and steel workers their jobs, according to Yin Weimin, minister of human resources and social security. Reuters reports, no timetable for the layoffs was given.
There’s deflation in Europe. Prices in the euro zone fell 0.2% in February, making for their biggest drop since March. The core reading, which strips out the more volatile food and energy, printed 0.8%, down from 1% in January. Monday’s data has raised expectations the ECB will lower its deposit rate even further into negative territory at its upcoming meeting. The euro is weaker by 0.4% at 1.0887.
German yields is falling. The deflationary reading in Europe has pushed German yields into negative territory out to 9 years. The benchmark 10-year yield is down 4 basis points at 10.6 bps, and at its lowest level since April. Should the yield fall below 7.5 bps it would make for an all-time low.
Berkshire Hathaway profit hit a record. The Warren Buffett-led conglomerate announced earnings of $3,333 per share, easily beating the $2,529 that was expected by the Bloomberg consensus. Profits surged 32% to a record $5.48 billion. In his letter to shareholders, Buffett noted BNSF railroad “dramatically improved” after a bad 2014. Additionally, Buffett said the company bought more of its big four investments (American Express, Coca-Cola, IBM and Wells Fargo) over the past year.
Valeant’s CEO is coming back from medical leave. Mike Pearson is back at the helm of Valeant Pharmaceuticals after taking a medical leave in December. Pearson temporarily stepped down from the role as he suffered from pneumonia and complications related to the illness. Valeant announced it will be separating the roles of CEO and chairman, and that Robert Ingram has been appointed Chairman of the Board.
Nintendo gave a downbeat forecast. Video game maker Nintendo lowered its net income forecast by 51% to 17 billion yen ($150 million) for its fiscal year ending in March. The company expects the recent strength of the yen to reduce operating income by 20 billion yen and now projects that number to fall to 33 billion yen, down from 50 billion yen. Nintendo’s revenue forecast of 500 billion yen is the lowest in at least 15 years, according to Bloomberg.
Stock markets everywhere are lower. China’s Shanghai Composite (-2.9%) lagged in Asia and Germany’s DAX (-1.1%) paces the decline in Europe. S&P 500 futures are lower by 3.50 points at 1939.50.
Earnings reporting remains heavy. AMC Entertainment, Lumber Liquidators, and Valeant Pharmaceuticals are among the names reporting before the opening bell. Crox, Hertz Global, and MBIA are among the names releasing their quarterly results after markets close.
US economic data flows. Chicago PMI is due out at 9:45 a.m. ET and pending home sales will cross the wires at 10 a.m. ET. The US 10-year yield is down 2 bps at 1.74%.
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