Here is what you need to know.
China’s trade surplus narrowed. China’s trade surplus narrowed to $32.59 billion in February, missing the $50.15 billion that was expected by a large margin. Exports tumbled 25.4% compared to a year ago while imports sank by 13.8%. Both readings were shy of expectations as exports were expected to have fallen by 12.5% and imports were thought to have dropped 10%. China’s yuan strengthened 0.2% to 6.5060 per dollar.
Japanese yields tumbled to a record low. Strong demand for Tuesday’s 30-year Japanese Government Bond auction pressed longer dated yields to record lows. The benchmark 10-year yield fell 5.6 basis points to -0.116% and the 30-year crashed 22 bps to 46 bps. The strong auction follows Monday’s comments from Bank of Japan head Haruhiko Kuroda suggesting he’d like to see how the economy responds to negative interest rates before deciding whether or not more action is needed to stimulate the Japanese economy. On Tuesday, the government received a small bit of good news as Q4 Final GDP came out at -0.3% quarter-over-quarter, ticking up from the previous read of -0.4%.
Germany’s industrial production surged. Industrial production in Germany climbed 3.3% month-over-month, easily beating the 0.5% growth that was expected by the Bloomberg consensus. The January gain was the biggest since September 2009. “After a weak spell in second half 2015, the manufacturing industry had a very good start in the new year,” the Economy Ministry said in a press release. “Overall, a moderate recovery in industrial activity is expected in the first quarter.” The euro is little changed at 1.1012.
The Bank of England is prepping for a Brexit. The FT reports the Bank of England is willing to flood the UK banking system with cash in the event of a Brexit vote. The BOE’s plan is to offer three windows ahead of the vote where banks can borrow as much cash as they need to prevent bank runs. The British pound is down 0.4% at 1.4205.
Shake Shack gave disappointing guidance. The fast-food burger joint announced adjusted earnings of $0.08 per share, topping the Bloomberg consensus by a penny. Revenue climbed 46.8% to $51.1 million, which was a bit better than the $50.3 million that was expected. Additionally, the closely followed metric of same-shack sales grew 11%. However, Shake Shack’s guidance was light. The company sees same-shack sales growth of 2.5% to 3%, below the 3.1% that Wall Street was anticipating. Shake Shack shares were down as much as 8% in after-hours trade.
Nike suspended its relationship with Maria Sharapova. The athletic shoe giant suspended its deal with tennis star Maria Sharapova after she admitted to testing positive for the recently-banned substance meldonium. The deal is the most lucrative given by Nike to a female athlete, worth around $100 million over eight years, according to UK-based sports marketing and sponsorship consultant Nigel Currie. “We are saddened and surprised by the news about Maria Sharapova. We have decided to suspend our relationship with Maria while the investigation continues. We continue to monitor the situation,” Nike said in a statement.
Wall Street bonuses tumbled in 2015. Reuters reports, data released by the New York State Comptroller showed the average Wall Street bonus fell 9% to $146,200 in 2015. New York State Comptroller Thomas DiNapoli said in a statement that the drop reflected a “challenging year in the financial markets.”
Stock markets around the world are lower. Japan’s Nikkei (-0.8%) led the losses in Asia and France’s CAC (-1.4%) paces the decline in Europe. S&P 500 futures are off 12.75 points at 1986.25.
Earnings reporting is slow. Dick’s Sporting Goods will release its quarterly report ahead of the opening bell.
US economic data is light. Wholesale inventories will be released at 10 a.m. ET and crude oil inventories will cross the wires at 10:30 a.m. ET. The US 10-year yield is lower by 6 bps at 1.84%.