No additional stimulus from China?
The Street was excited yesterday on talk that China would announce additional stimulus measures today, but the Chinese premier did not offer any additional stimulus details during the opening session of the National People's Congress. They did reiterate their belief that GDP would come in at 8 percent this year.
Commodity stocks like BHP Billiton, Alcoa and ArcelorMittal, which rose yesterday, are down mid single digits this morning.
Alcoa also down as Merrill cut its target price.
1) Futures, already weak, took an additional 5-point dip at 8:30 AM ET as revised Productivity numbers for the fourth quarter came in well below expectations, and Unit Labor Costs rose.
2) February retail sales: most were still down, but there were some pockets of positive news.
*Wal-Mart up 3 percent pre-open, did significantly better: same store sales up 5.1 percent, better than the 2.2 percent expected.
*Family Dollar up 8 percent pre-open, also reported numbers well above expectations and guided higher for the quarter ($0.59-$0.61 vs. $0.51 consensus)
*Kohls had results better than expected (down 1.6 percent, vs. expectations of down 4 percent) and said February sales results "exceeded our expectations" as regular price selling offset significantly lower levels of clearance sales.
Also better than expected: Gap, and teen retailers like Aeropostale (merchandise margins increased over last year, inventories were well controlled and on plan), American Eagle, Hot Topic and Wet Seal.
Worse than expected: Abercrombie (sales down 30 percent, way worse than 19.7 percent decline expected), Macy's
3) GM down again as its auditors raised "substantial doubt" about its ability to survive outside of bankruptcy. No surprise here; GM said last month it was likely auditors would raise the question.
4) Wells Fargo down 8 percent as Moody's warned it is considering downgrading its credit rating.
5) The Bank of England reduced its benchmark rate to 0.5 percent, the lowest ever.
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