Bloomberg Business
-Deutsche Bank surges: Deutsche Bank AG shares jumped as much as 15 percent this morning and were trading 13.5 percent higher at 11:05 a.m. London time, leading a surge in European bank shares that sees every bank on the Euro Stoxx Bank Index trading higher. Deutsche Bank is considering a bond buyback to help ease investor concerns, according to a person with knowledge of the matter. The stock remains down over 30 percent since the start of 2016.
-Yellen testimony: Federal Reserve Chair Janet Yellen is due to begin her semiannual testimony to Congress later this morning. With market expectations for a rate cut from the Fed on the rise, investors will be looking to see if she pushes back against those expectations in her remarks. Dollar bulls, who have been having a rough start to 2016, may not get any salvation from today’s testimony, according to Citigroup.
-New Hampshire hangover: As expected, Donald Trump and Bernie Sanders triumphed in the New Hampshire primary. Hillary Clinton, who lost by 21 percentage points, has promised to «retool» her message. On the Republican side, Trump garnered 35 percent of the vote, with his closest competitor, Ohio Governor John Kasich, getting 16 percent. New Jersey Governor Chris Christie said he’s returning home to reevaluate his campaign after a poor showing in the vote.
-Oil: Oil is rising this morning following yesterday’s collapse that added to a four-session 13 percent decline. West Texas Intermediate for March delivery added as much as 79 cents to reach $28.73 a barrel on the New York Mercantile Exchange and was at $28.66 at 11.30 a.m. London time. The message from the oil industry’s annual gathering in London is that the worst of the price slump isn’t over yet. Rosneft OJSC’s CEO Igor Sechin remains skeptical on an OPEC-Russia oil deal. Global shipping giant Maersk is tumbling today after posting weak results, in part due to the energy industry.
-Treasury demand: The U.S. Treasury is scheduled to auction $23 billion of 10-year debt later today as benchmark yields fall to the lowest in a year. In pre-auction trading the February 2026 notes were yielding 1.76 percent, which would be the lowest at sale since December 2012 for a benchmark 10-year. The low yields come as investor concerns over the global economy, the Fed’s rate path, and the possibility of central banks pushing much further into negative territory increase.
CNN Money
– Banks bounce back: European banking stocks are rebounding after a miserable start to the year. Deutsche Bank (DB) is leading the way — its shares jumped 12% after CEO John Cryan said Tuesday the bank was «rock solid.» Sentiment was helped by media reports that it might buy back some debt — a trade that could make the bank money if it pays less than face value for the bonds. Deutsche declined to comment on the reports.
-Other movers — Disney, Arm: Disney (DIS) shares were down as much as 6% during extended trading after an earnings update, even though it revealed its ESPN television network gained subscribers and «Star Wars» gave the studio record box office totals. Analysts were expecting better. Shares in chip designer Arm Holdings (ARMH, Tech30) are down 2% in London after reporting earnings in line with expectations. The smartphone supplier has suffered recently along with Apple (AAPL, Tech30) shares.
-Earnings: Companies reporting ahead of the open include Humana (HUM) and Time Warner (TWX), CNN’s parent company. Among the companies that investors will hear from this afternoon are Cisco (CSCO, Tech30), Prudential (PRU), Whole Foods (WFM), Tesla (TSLA) and Twitter (TWTR, Tech30).
– Market overview: European markets are jumping by about 2% in trading on the back of the bank rally. Asia Pacific markets ended lower, with the Nikkei down 2.3% to its lowest level since October 2014. On Tuesday, the Dow Jones industrial average and the S&P 500 each shed 0.1%, and the Nasdaq was down 0.4%.
-Janet Yellen: Market turmoil and dollar could hurt economy; Federal Reserve Chair Janet Yellen sees warning signs ahead for the U.S. economy. In prepared remarks to be delivered as part of her two-day testimony before Congress starting Wednesday, Yellen acknowledged that there were several risks to U.S. economic growth — cost of borrowing was rising, stock prices have declined a lot in the first few weeks of the year and the dollar continues to strengthen against its global counterparts. «These developments, if they prove persistent, could weigh on the outlook for economic activity an the labor market,» Yellen said. These concerns will likely play a role on the Fed’s decision to raise rates this year. Yellen reiterated that the Fed expects to have «gradual» interest rate increases. The Fed’s committee meets next in mid-March. Many on Wall Street think a rate hike is unlikely. Yellen noted the gains in the job market — unemployment is a healthy 4.9% — and that consumer spending remained steady. She also repeated her view that low oil prices could help consumer spending.