Good morning. Here’s what you need to know.
Fuel cell stocks going crazy in pre-market trading. Fuel cell stocks continue their surge this morning in pre-market trading following FuelCell Energy’s announcement of quarterly earnings results. The company’s loss of $US0.06 per share was slightly worse than expected, but it reported revenues of $US44.4 million, topping analysts’ $US43.4 million consensus estimate. FCEL is trading up over 18% on the news.
Small business optimism tumbles. NFIB’s Small Business Optimism Index fell to 91.4 in February from 94.1 in January. The consensus forecast of market economists predicted a smaller moderation to 93.8. “Small business optimism continues its winter hibernation with the latest Index dropping 2.7 points to 91.4, a reading that historically has been associated with recessions and periods of sub-par growth,” said Bill Dunkelberg, chief economist at NFIB, in a press release. “The one highlight in the January survey, a surge in hiring plans, was crushed in February by the continued onslaught of a wintry recovery now in its 5th year.”
Markets are quiet. S&P 500 and U.S. Treasury futures are pointing to an unchanged open. Gold is up a bit, trading around $US1348 an ounce. The German DAX and the Italian FTSE MIB are up, but most other European indices are in the red. Overnight, the Japanese Nikkei 225 rose 0.7% and Chinese indices eked out gains.
Nothing from the BoJ. The Bank of Japan elected to refrain from introducing any new policy measures at the conclusion of its latest meeting on monetary policy, as expected, and the U.S. dollar is unchanged against the Japanese yen this morning. “The assessments of the economy in the statement were marginally changed, upgrading those on the fixed investments and the industrial productions slightly while downgrading the one on the exports,” says Osamu Takashima, a strategist at Citi. “All in all, the positive tone in the assessments is unchanged, which justifies the Bank’s conservative stance toward additional measures. Our economists in Tokyo see a 80% possibility of the next action at the June or July meetings while also seeing a 20% risk at the April meeting, after the consumption tax hike.”
Mobile price wars. In an interview with Charlie Rose, SoftBank tycoon Masayoshi Son said he wanted to buy T-Mobile’s U.S. unit and engage in a price war with wireless carriers AT&T and Verizon. SoftBank already owns a controlling stake in Sprint. “If I can have the real fight, I go in a more massive price war,” said Son. “I want to be number one. So if we are number three, and if we have enough chance, I want to be number one. So I would go to price competition, very much aggressively.”
German surpluses. Germany recorded a 16.2 billion euro current account surplus in January, down from December’s 21.1 billion euro surplus but above consensus estimates of a 15.3 billion euro surplus. German exports rose 2.2% and imports rose 4.1% — both above expectations — narrowing Germany’s trade surplus to 17.2 billion euros from 18.3 billion euros.
Final read on Italian GDP. Revised data released today revealed that Italian GDP rose 0.1% on a work-day adjusted basis in the fourth quarter of 2013, in line with previous official and market estimates. Year-over-year GDP growth, however, was revised down to -0.9% from -0.8%.
Muted U.K. industrial production. U.K. industrial production rose 0.1% from the previous month in January, marking a slowdown from December’s 0.5% pace of expansion and missing estimates for a 0.2% gain. The year-over-year rate of industrial output growth was 2.9%, also slightly below consensus estimates. “The floods are thought to have distorted the data, but the take away is that the U.K. is still enjoying relatively robust economic activity,” says Marc Chandler, global head of currency strategy at Brown Brothers Harriman. “Several BoE officials testify before the parliament, but their general stance is known, and barring a surprise, is unlikely to change the market’s direction.”
Second-tier U.S. economic data. There are no major releases on the U.S. economic data calendar today. However, the U.S. Bureau of Labour Statistics will release the results of the latest Job Openings and Labour Turnover Survey — a favourite metric of new Fed chair Janet Yellen’s — at 10 AM ET. January wholesale inventories data are also out at 10 AM.
Mid-month supply calendar begins. The U.S. Treasury will auction $US30 billion of 3-year notes today at 1 PM ET. “With some short covering around/after the stronger-than-expected U.S. jobs number, positioning should be cleaner, and given supply-related concession, the UST market may get biased lower in this relatively data-light week,” say Nomura interest rate strategists. “Given all but one of the 3-year auctions since last July have come through the 1 PM mark, we expect this auction to go well, especially given lingering geopolitical uncertainties.”
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