Wednesday, March 3, 2010

Today’s Top Stories $AAPL

·         Greece - the Greek gov't has approved fresh austerity steps that are worth EU4.8B.  Among the measures approved - the VAT will be increased from 19% to 21% while civil service salaries and entitlements will be cut.  CDS spreads on the usual suspects in Europe are all flattish as the budget cuts were widely expected (Italy, Spain, Greece, etc, are all flattish).  The market is still waiting for further headlines on the much anticipated German/French-engineered ~EU30B bailout for Greece involving German and French state-owned banks.  Greece’s PM has apparently told the country’s cabinet that he will seek IMF assistance if EU aid isn’t forthcoming. 

·         Euro trading - Many of the world’s biggest hedge funds have become increasingly concerned about fierce criticism by European politicians that their country bets have heightened the crisis of confidence in some markets.  Some HFs have concluded that the political and regulatory risks associated with positions against individual countries in the currency bloc were now too unpalatable.  However, while HFs are backing away from individual country sovereign CDS, they are using the euro to express their outlooks – “Hedge funds are now expressing the same view on the weaknesses of individual eurozone countries via the euro”.  However, US regulators are asking hedge funds not to destroy trading records pertaining to their euro trading.  FT /WSJ

·         Eco data in the Eurozone came in better overnight with Eurozone Retail sales dn less than expected and the UK Services PMI up more than expected.

·         In China, the government auctioned 1yr bonds at a less-than-forecast yield, the deputy governor of the People’s Bank of China, said today that China’s economy will perform better this year than in 2009 and China’s February exports increased from a year earlier.

·         US eco growth trimmed for Q1 – from JPMorgan’s M Feroli - Recent incoming data, along with a projection for weak February data, suggest first quarter GDP growth is tracking a bit below our previous 3% estimate, and to better balance the risks around that outlook we are revising down estimated Q1 GDP growth to 2.5%. 

·         COST – earnings fall short this morning; 10:00 AM conference call (dial in: 800-399-8203). 

·         AAPL – two items of note today: 1) Apple store employees will get their first hands-on experience with the iPad and begin training on March 10, while consumers could be able to purchase one Friday, March 26 (Apple Insider); 2) Taiwan component suppliers doubt stories of iPad production disruptions - Foxconn's component suppliers have said their supplies are on schedule and Foxconn should be able to ship 600,000-700,000 iPads in March and one million units in April.  Digitimes

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