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14Apr2015 Pre-Market Commentary: First Quarter Earnings Re Starting To Takes Its Toll On The Futures As Retail Sales Slip Moving Futures Lower

Written by Gary

Premarket spiked briefly this morning after Wells Fargo revealed its first-quarter profits per share of $1.04, handily topping expectations for 98 cents and Johnson & Johnson posted a beat on both lines in the first quarter.

U.S. Equities futures then dropped, at least temporarily, when U.S. Advance Retail Sales (MAR) fell below expectations, but rose over last report. The figure is a significant market mover, valuable both for its timeliness and insight into consumer demand and consumer confidence.

Markets are expected to open lower.

Here is the current market situation from CNN Money

European markets are mixed. The FTSE 100 is higher by 0.26%, while the CAC 40 is leading the DAX lower. They are down 0.58% and 0.45% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

JPMorgan Chase Profit Rises 12% on Strong Trading

The bank experienced rebounds in some of the big businesses that had been lagging and fueling criticism of the company.

Nokia in talks to buy Alcatel-Lucent; France wary about jobs

HELSINKI/PARIS (Reuters) - Nokia Oyj is in talks to buy smaller telecom equipment maker Alcatel-Lucent , a deal that would combine the industry's two weakest players but could pose challenges in cutting costs and overcoming political opposition.

Oil above $58 on U.S. shale output report, Mideast

LONDON (Reuters) - Crude oil rose on Tuesday after a forecast that U.S. shale oil output would record its first monthly decline in more than four years and on tension in Yemen, where top oil exporter Saudi Arabia is embroiled in a civil war.

U.S. safety regulators probe Subaru cars' air bags

DETROIT (Reuters) - U.S. safety regulators have opened an investigation into Subaru Impreza cars from model year 2012 because the front passenger seat air bags may fail to operate.

JPY Jumps After Abe Special Adviser Shows He Has No Shame Whatsoever

It appears being Special Adviser to Japanese Prime Minister Shinzo Abe comes with great prerssure to toe the line - as opposed to advise. Koichi Hamada yesterday said USDJPY 105 was "appropriate" and USDJPY 120 was "too weak"... that sent USDJPY tumbling. These comments were reiterated in the early Asia session and adding that he "doesn't think JPY will weaken much further." We wake up this morning and reuters reports that he has entirely flip-flopped his views saying now that "120 is appropriate," and that he " would not oppose further easing." It's clear someone got a tap on the shoulder...







The yen is fairly valued around current levels, a key economic adviser to Prime Minister Shinzo Abe said on Tuesday, a day after comments he made were taken to mean the yen was too weak.

"120 yen per dollar is acceptable," Hamada said in an interview.

"I would not oppose further easing on April 30, because inflation won't be generated even if the central bank eases again," he said. "But I would not on my own oppose the BOJ adopting monetary ...

Wells Fargo profit falls as expenses rise

(Reuters) - Wells Fargo & Co , the largest U.S. mortgage lender, reported a 2.6 percent fall in quarterly profit on Tuesday as expenses rose and the bank set aside more money to cover bad loans.

SEC investigating sale of complex securities to mom-and-pop investors: official

WASHINGTON (Reuters) - A top regulator on Tuesday said the Securities and Exchange Commission will bring more enforcement actions against companies selling complex securities and risky structured products to retail investors.

JPMorgan profit rises as fixed-income trading rebounds

(Reuters) - JPMorgan Chase & Co, the biggest U.S. bank by assets, reported a better-than-expected rise in quarterly profit on Tuesday as revenue from fixed-income trading rebounded.

Bits Blog: Docker Raises Another $95 Million in Funding

The company behind one of the fastest-growing open-source software projects in history takes a fourth round of financing. They money is an indication of the pressures companies face to move fast as technology changes.

Johnson & Johnson Profit Beats Forecasts

Johnson & Johnson (JNJ) on Tuesday reported first-quarter profit of $4.32 billion.

Bits Blog: Twilio Adds Video to Its Offerings for Software Developers

A company that makes it possible to add voice or text communications to any application will include video capabilities in its package.

Frontrunning: April 14

Shale Oil Boom Could End in May After Price Collapse (BBG)

Oil above $58 on U.S. shale output report, Mideast (Reuters)

Ackman Says Student Loans Are the Biggest Risk in the Credit Market (BBG)

Alibaba Disputes U.S. Group's Claim it Tolerates Fake Goods on Taobao (WSJ)

Petrobras takes steps to avert a technical default (FT)

Yen's Drop Is Approaching Its Limit, Says Abe Adviser Hamada (BBG)

'Slicing and dicing': How some U.S. firms could win big in 2016 elections (Reuters)

Fed official warns â€'flash crash' could be repeatedv (FT)

China on Oil-Buying Spree Again (WSJ)

China Money Rate Declines to 11-Month Low as Reverse-Repo Cut (

JPM Non-GAAP Revenues Beat, Earnings Rise On Reduced Legal Charges

Following countless quarters in which JPM suffered about $30 billion in legal charges, the tempets in Jamie Dimon's legal settlement teapot may be quieting down, with a quarter in which JPM experienced "only" $687 million in pre-tax legal expenses, or about $0.13 in EPS.

As a result of this reduced kickback to the government to continue operating, JPM managed to beat expectations on both the top and bottom line, printing revenues and EPS of $24.8 billion amd $1.45 respectively, fractionally higher than the $24.5 Bn and $1.41 expected.

Actually, half of that was accurate: JPM's GAAP revenue of $24.1 billion missed expectations, however its "managed basis" non-GAAP revenue did beat.

So where did JPM derive its Q1 growth, GAAP, non-GAAP or otherwise?

Well, the core business of consumer and community banking reported Net Revenue of $10.7 billion, down from Q4, but barely up from a year ago, which as a result of expense cuts led to a $238MM increase in Net Income to $2.2 billion.

Network Security Start-Up Illumio Raises $100 Million

Total fund-raising is $142.5 million, a fast beginning for the start-up, which provides protection for data centers and cloud services.

One Company's New Minimum Wage: $70,000 a Year

The owner of a small credit card processing company, Gravity Payments, said he heard stories of how tough it was to make ends meet even on salaries that exceeded the federal minimum wage. Above, the company's offices in Seattle.

Japan PM adviser Hamada says dollar at Y120 acceptable

TOKYO (Reuters) - The yen is fairly valued around current levels, a key economic adviser to Prime Minister Shinzo Abe said on Tuesday, a day after comments he made were taken to mean the yen was too weak.

Citi seeking to sell retail FX arm: source

LONDON (Reuters) - Citigroup Inc is looking for a buyer for its retail forex brokerage CitiFX Pro as part of efforts to streamline the banking world's biggest currency trading operation, a source familiar with the situation told Reuters on Tuesday.

China premier says downward pressure on economy still increasing: state radio

BEIJING (Reuters) - Pressure on China's economy is increasing, and the country must prepare to face bigger economic difficulties, Premier Li Keqiang was reported as saying by Chinese state radio on Tuesday.

Futures Slump As Asian Stock Bubble Calls A Timeout

Judging by the recent action in equity futures, the continuously rangebound US market since the end of QE may be entering its latest downphase, catalyzed to a big extent by the recent strength in the JPY (the EURJPY traded down to 2 year lows overnight), especially following yesterday's not one but two statements by Abe advisor Harada saying a USDJPY at 125 isn't "justified" and a 105 level would be appropriate. A level, incidentally, which would push the Nikkei lower by about 20% and crush Japanese pensions which are now mostly invested in stocks. Not helping matters was the pause in the Chinese and Hang Seng stock bubbles, with the former barely rising 0.3%, while the former actually seeing its first 1.6% decline after many days of torrid, relentless rises.

That said, everything can and will change with today's March retail sales update. As a reminder, the past three months have seen the worst stretch since Lehman when it comes to US consumers spending their money at retail outlets or online, which has been mostly blamed on the winter. Of course, now that "bad is good" and vice versa once more, tje much anticipated rebound in retail sales will be very stock negative as it may mean that the Fed's June tightening is back on schedule. A jump in PPI today will also be bad news for momentum chasing "traders."

Indeed, Asian stocks traded mixed following a lacklustre Wall Street close, with investors observing caution ahead of the looming earnings season. The Shanghai Comp (0.3%) outperformed led by railway names amid talks that China is to invest CNY 2.8trl in railway infrastructure, while the Hang Seng (-1.6%) paused for breath, following its recent surge. Nikkei 225 (flat) consolidated throughout the session weighed on by continued JPY strength.

Bunds have ebbed higher in early trade to print yet another fresh contr ...

Futures edge lower with earnings awaited

NEW YORK (Reuters) - U.S. stock index futures edged lower on Tuesday as investors awaited a number of key earnings results, including from a pair of large-cap banks.

Banks see talent flee amid healthcare M&A boom

NEW YORK (Reuters) - Several high-ranking bankers have left their jobs at major investment banks in the last 13 months amid a surge in U.S. healthcare deal activity to seek better compensation at boutique investment banks as well as to participate in the growth of the industry at biotech companies themselves.

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