Cyprus reopens banks under tight restrictions. Stiff capital controls announced Wednesday designed to cut off the flow of money were in place as Cypriot banks reopened this morning. Banks have been shut for nearly two weeks as the government negotiated a bailout package with the EU and became the first eurozone country to impose losses on bank depositors. Cash withdrawals are limited to €300 per day, time deposits cannot be withdrawn until maturity, and check-cashing is banned. Additionally, anyone leaving the country may take only €1K euros with them, down from €3K in an early draft of the restrictions.
Worldwide central banks’ gold reserves sextupled since 2000: World Gold Council. How will this shift affect supply and thus prices? — Read more here »
Fed doves make themselves heard. "I think this is the point where we have to be patient and let our policies work," the Chicago Fed’s Charles Evans told reporters. Separately, Boston’s Eric Rosengren and Minneapolis’ Narayana Kocherlakota presented a similar theme, with Kocherlakota even suggesting the Fed isn’t stimulative enough right now. The Cleveland Fed’s Sandra Pianalto was a little more moderate, saying the economic numbers she’s seeing – should they hold a while longer – might argue for a tapering off of asset purchases.
S&P 500 to take another crack at record. Stocks shed big early losses yesterday and closed about flat, leaving the S&P 500 (SPY) at 1,562, just shy of its all-time high of 1,565 set in October 2007. Italy’s difficulty in forming a government combined with the continuing drama in Cyprus to lead to the shaky start, but – as has been the case for months – dip-buyers stepped in and forced an afternoon rally.
Top Stock News
Chesapeake CEO search to extend past deadline. Chesapeake’s (CHK) board’s search for a CEO to replace departing Aubrey McClendon is likely to extend beyond an April 1 deadline, reported Reuters, citing an unnamed source. McClendon is expected to step down on Monday even if a replacement isn’t found, with COO Steve Dixon and Chairman Archie Dunham set to temporarily lead the company. The reasons for the delay aren’t available, but the company faces challenges on a number of financial and regulatory fronts, and there’s a crowded field of energy companies hunting for CEOs at the moment.
Wal-Mart may get customers to deliver packages. Trying to better compete with Amazon (AMZN), Wal-Mart (WMT) is considering a radical plan in which store customers would deliver packages to online buyers. The move – essentially renting out space in customers’ cars as delivery vehicles – would put the retailing behemoth squarely in the middle of the "crowd-sourcing" phenomenon in which people casually rent out a spare room, a car, or even an article of clothing. "This is at the brain-storming stage, but it’s possible in a year or two," says the company’s SVP of U.S. innovations.
S&P seeks to merge state suits. With seventeen lawsuits piled up against it by state attorneys general for pushing out shoddy ratings, Standard & Poor’s (MHP) moved to have them combined into one case and switched to federal court. S&P faces billions in losses, but could limit legal exposure should it prevail in this skirmish. The decision on whether to combine the cases will be made by a federal panel, but could be months away.
JPMorgan outlook raised. With credit fears from the "London Whale" incident fading, S&P upgraded JPMorgan’s (JPM) outlook to stable from negative. The bank "has successfully addressed our concerns regarding risk-management missteps in its chief investment office portfolio … corrective actions should prevent additional issues from arising."
Judge questions $20M payout to AMR CEO. A bankruptcy judge called the $20M exit package for outgoing AMR (AAMRQ.PK) CEO Tom Horton inappropriate, citing it as his only "hang-up" in approving the merger with US Airways (LCC). The DOJ had objected to the payout, calling it an "end run around" federal law limiting payments to executive running firms under Chapter 11 protection. Nevertheless, the merger now moves to a shareholder vote. The fate of Mr. Horton’s severance though, remains unclear.
China worries arise in Sprint deal. The U.S. government requested oversight of network-equipment purchases as a condition for approving Softbank’s (SFTBY.PK) $20B acquisition of Sprint Nextel (S). Sources say the move is aimed at keeping suppliers like China’s Huawei and ZTE Corp. out of the market. Trade rules disallow the government from specifically excluding gear from these companies, but "You have to find a way to say, ‘Don’t buy from the Chinese,’ without saying, ‘Don’t buy from the Chinese,’" says a person who has spoken with Sprint.
Top Economic & Other News
Beijing vows shadow banking crackdown. Shanghai tumbled 2.8% – led by the banks – after regulators demanded more openness regarding non-traditional wealth-management products. The opacity of the current system makes it difficult for Beijing to gauge how much of a risk they are to the country’s economic health should they turn sour.
German retail sales surprise to the upside. German retail sales rose 0.4% in February, unexpectedly rising for a second consecutive month (they jumped 3% in January). On a year over year basis, the trend however, remains down, with sales off 2.2%. "We see strong German consumption going forward due to the very robust labor market," says economist Alex Krueger. "Still … the debt crisis keeps boiling over and that’s weighing on demand."
In Asia, Japan -1.3% to 12336. Hong Kong -0.7% to 22300. China -2.8% to 2236. India +0.7% to 18836.
In Europe, at midday, London +0.5%. Paris +0.3%. Frankfurt +0.4%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude +0.2% to $96.75. Gold -0.2% to $1603.35.
Today’s economic calendar:
8:30 Initial Jobless Claims
8:30 GDP Q4
8:30 Corporate Profits
9:45 Bloomberg Consumer Comfort Index
9:45 Chicago PMI
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings after today’s close: None
See full real-time earnings coverage »
Wall Street Breakfast is sent out by email for free — Get it now »