Thursday, April 21, 2011

Initial Jobless Claims: Survey 390k Actual 403 Prior 412 Revised 416

Recall that last week jobless claims were 32k higher than expectations. Today’s data does not resume
the positive trend of initial jobless claims. Ideally, we will start seeing numbers in the mid or low 300’s,
which is consistent with past expansions.

GE reports 1Q earnings, beats on top & bottom line with huge beat on GE capital. Energy was a
bit light on weak wind/power margins. Dividend hiked 0.01 per quarter. Stock is up ~2.7% in pre-
market.
FITB reports earnings – EPS came in 0.27 vs. Street expectations of 0.23. NIM 3.71% (St 3.79%).
1Q11 net charge-offs of $367 million (1.92 percent of loans and leases) vs. 4Q10 NCOs of $356 million.
NPA ratio of 2.73 percent down 6 bps from 4Q10, NPL ratio of 2.11 percent down 4 bps from 4Q10.
Book value per share of $12.80; tangible book value per share of $10.11. Average portfolio loans
increased 2 percent sequentially but were flat on a period end basis, as demand remains below par for
this stage of the recovery and low rates have increased borrower refinancings in the capital markets.
Provisions $168MM vs. the Street expectations of $184MM. Stock is flat in pre-market.
Paul Kedrosky sums up the market reaction to S&P’s negative U.S. outlook: “We had lower
yields in U.S. treasuries as people afraid of a default on U.S. treasuries bought U.S. treasuries to stay safe
from a potential crisis in U.S. treasuries.” – Bloomberg Blog
Spanish debt auction – Spain was able to issue 3.4B euros of bonds maturing in 2021 and 2024
this morning, the top end of their 2.5-3.5B euro target. Yields on the 10-year rose to 5.472% from
5.162%, while the 2024 bond had a yield of 5.667%. The bid to cover for the 10-year rose to 2.1, up from
1.8 before, while the bid to cover on the 2024 bond came in at 2.3. Given the country raised an amt near
the top of their target, the auction is being viewed positively, sending sov debt spreads tighter. Reuters
Libyan oil sales – there will be a meeting in Rome next month to discuss ways of helping Libyan
rebels to sell crude and raise money – Reuters – over 1 million barrels per day coming back online would
be a large incremental positive.