Good morning! Here’s what you need to know.
— The European Central Bank and the Bank of England both left rates unchanged. The regions face opposite problems: there are now signs the Eurozone is at risk of deflating, while some analysts think the U.K.’s property market is overheating. Still, economists expected both banks to keep policy easy and rates unchanged at extraordinarily low levels.
— European markets are up ahead of the announcements. Asian markets broadly fell in Thursday trading. U.S. futures were higher.
— U.S. energy secretary Ernest Moniz has canceled a planned trip to India in the most serious escalation yet over a diplomatic row over the arrest and detention of India’s NY deputy consul general . Devyani Khobragade was charged with Visa fraud, and her treatment while in custody was vigorously defended by NY Southern District U.S. Attorney Preet Bharara. Reuters: “While both sides have said their bilateral relationship is important and will not be allowed to deteriorate, the row over Khobragade, which should not have been more than an easily resolved irritation, has plunged the two countries into a crisis described by Indian media as the worst since New Delhi tested a nuclear device in 1998.
— The only major economic data point today is jobless claims, which print at 8:30 a.m. Analysts expect a drop to 331,000 from 339,000. The extension of federal unemployment insurance remains in limbo, and Jeffrey Bartash at Marketwatch has a good write up of what happened when North Carolina cut its state unemployment benefits: “Last summer, North Carolina slashed the amount of cash it gave to people after they lost their jobs and the state also reduced the number of weeks they could receive benefits. Within several months, the unemployment rate fell a few ticks and by November it fell to a five-year low. Government data also shows that more than 22,000 North Carolinians found work since the cutoff and the number of unemployed sank by nearly 73,000 to 344,000. What the data doesn’t tell us, however, is what happened to all the people no longer classified as unemployed. While some found a job, others may have retired, ended up on welfare, moved in with family members, sought disability payments or fled to a nearby state with better benefits. We just don’t know.”
— The quarterly earnings season officially kicks off today, as Alcoa reports after the bell. Shares in the aluminium producer were up more than 2% in after-hours trading. In AM earnings, Family Dollar shares are down more than 1% after warning on Q2 and full-year earnings, while Supervalu is up more than 1% on strong profits.
— Bed Bath and Beyond shares tanked nearly 9% in after hours trading Wednesday after the retailer reported revenue and same store sales below expectations, as well as lowered full-year earnings guidance.
— Meanwhile, Macy’s shares surged more than 5% in after-hours trading after that retailer reported same-store sales in November and December had climbed 3.6%. It also announced a round of job cuts and store closings.
— IBM now says it wants to build an entire business around Watson, its “cognitive” computer, and is fronting $US1 billion for the project. FT: “While only a handful of customers have used the technology up to now, [Michael Rhodin, the IBM senior vice-president named to run the new Watson division] said many others were ‘breaking down the doors’ to get access to it and that IBM believed revenues from the business could quickly reach the ‘billions’. IBM recently raised its forecast of the annual revenues it will make in 2015 from data analytics — of which Watson is a part — by $US4bn, to $US20bn.”
— BlackRock says it will stop surveying Wall Street analysts to gain information about company outlooks before research units publish their views. NYT: “The decision was reached late Wednesday as part of a settlement with Eric T. Schneiderman, the New York attorney general. The settlement document filed in the case contended that BlackRock’s surveys “allowed it to obtain information from analysts that could reveal forthcoming revisions to their published views” on companies they followed. The firm will also pay $US400,000 to cover costs of the investigation.”
— Norway’s sovereign wealth fund, the world’s largest, is struggling to meet its goals, and is now seeking authorization to expand the kind of assets it can hold. Bloomberg: “Investing in pipelines, roads and other infrastructure would be a good fit for the wealth fund as the government considers ways to get more out of the investor, Prime Minister Erna Solberg said yesterday in an interview in Oslo.”