In her testimony before Congress’ Joint Economic Committee, Federal Reserve Bank Chair Janet Yellen took a reassuring tone and said that the US economy was back on track after a harsh winter. Yellen said the bank has seen business activity improve following the nation’s first quarter figures, which had been depressed due to the unusually severe winter weather. She said the most recent economic indicators point to growth for the US in the second quarter.
However, Yellen admitted that housing data was still troubling. In late 2013, home sales data began to turn downward and has since shown no signs of improving. March existing home sales were down for the seventh month out of eight, while new building permits declined for the second consecutive month. Yellen told Congress that it is still unclear whether the decline will continue in the long term, but that it was something the bank was closely watching.
In other news around the markets:
- Following the release of Alibaba Group Holding Ltd’s IPO prospectus, red flags were raised as the document reveals several conflicts of interest for the company’s founder and executive chairman, Jack Ma. Ma’s investments in firms that partner with his company have proven controversial in the past, leading some investors to question the security of an investment in Alibaba.
- In an effort to increase profitability and cut down on costs, Barclays Plc announced it was planning to eliminate 19,000 jobs over the next three years. The bank is also planning to set up a “bad bank” which will house 16 billion pounds of assets including 115 billion pounds of risk-weighted assets, and 90 billion pounds made up of European retail banking operations and investment bank assets.
- For the second time in a week, the South China Sea was a point of contention for China and its neighbors. Dozens of Chinese military and civilian ships engaged with the Vietnamese coast guard and reportedly rammed the Vietnamese ship several times causing six Vietnamese officers to suffer injuries. The confrontation is the most serious in recent years and highlighted Beijing’s willingness to fight for its claim to the sea.
- Russian President Vladimir Putin took his first major step towards diffusing the situation in Ukraine on Wednesday when he urged pro-Russian separatists to postpone a succession vote less than a week before it was set to take place. Many saw his remarks as a turning point which pulled Ukraine back from the brink of a civil war.
Asian markets were mostly higher with the exception of the Shenzhen composite, which lost 0.27 percent. The Japanese NIKKEI was up 0.93 percent, the Shanghai composite gained 0.23 percent, the South Korean KOSPI was up 0.55 percent and the Hang Seng index gained 0.20 percent.
European Markets
European markets were up across the board; the UK’s FTSE rose 0.49 percent, the STOXX 600 was up 0.43 percent, the German DAX gained 0.54 percent and France’s CAC 40 was up 0.47 percent.
Energy futures were moderately lower; Brent futures lost 0.15 percent and WTI futures were down 0.10 percent. Gold was up 0.16 percent, but silver fell 0.29 percent. Industrial metals were lower with the exception of copper, which gained 0.21 percent. Aluminum lost 0.84 percent, zinc was down 1.14 percent and tin fell 0.28 percent.
The dollar struggled on Thursday, losing 0.10 percent against the euro and 0.15 percent against the franc. The pound was up 0.06 percent against the dollar, but lost 0.06 percent against the euro and the yen gained 0.13 percent against the dollar and 0.01 percent against the euro.
Earnings
Notable earnings released on Wednesday included:
- Prudential Financial, Inc. PRU reported first quarter EPS of $2.28, compared to last year’s EPS of $2.28 on revenue of $11.83 billion.
- 21st Century Fox FOXA reported third quarter EPS of $0.36, compared to last year’s EPS of $0.36 on revenue of $9.54 billion.
- Anheuser-Busch Inbev SA BUD reported first quarter EPS of $0.87, compared to last year’s EPS of $1.16 on revenue of $9.17 billion.
- Duke Energy Corporation DUK reported first quarter EPS of $1.17, compared to last year’s EPS of $1.02 on revenue of 5.90 billion.
Stocks moving in the Premarket included:
- Transocean Ltd RIG was up 3.65 percent in premarket trade after choppy trading took the stock up 0.60 percent over the past five days.
- General Electric CoGE gained 1.13 percent in premarket trade after rising 1.30 percent on Wednesday.
- Unum GroupUNM was down 0.36 percent in premarket trade after gaining 1.57 percent on Wednesday.
- Pfizer IncPFE was up 0.28 percent in premarket trade after falling 7.23 percent over the past week.
Notable earnings releases expected on Thursday include:
- Magna International, Inc. MGA is expected to report first quarter EPS of $1.98 on revenue of $8.90 billion, compared to last year’s EPS of $1.59 on revenue of $8.36 billion.
- DISH Network Corporation DISH is expected to report first quarter EPS of $0.43 on revenue of $3.58 billion, compared to last year’s EPS of $0.47 on revenue of $3.56 billion.
- Apache Corporation APA is expected to report first quarter EPS of $1.62 on revenue of $3.56 billion, compared to last year’s EPS of $2.02 on revenue of $4.08 billion.
- Global Partners LP GLP is expected to report first quarter EPS of $0.58 on revenue of $5.35 billion, compared to last year’s EPS of $0.51 on revenue of 5.59 billion.
Economics
The star of Thursday’s economic calendar will be the European Central Bank as it holds its policy meeting later in the day. Other notable economic releases include the Bank of England’s interest rate decision, Chinese CPI and US initial and continuing jobless claims.
For a recap of Wednesday’s market action, click here.
<p>Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin <a> http://optionshouse.benzinga.com/pre-market-show/ />here</a>.</p>
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