Greece's lending costs, domestic mortgage rates and the price of consumer goods: all headed higher. The video game industry wishes it could say the same about sales. As previewed yesterday, Google's new CEO is on the hot seat for finding a way to reduce fast-rising expenses and BP is still under shareholder pressure one year after the Gulf oil spill. Here's what we're watching for Friday…
1. No Dividend Hike for You!: In the wake ofJPMorgan's solid release on Wednesday, Bank of America is the next of the big banks to report quarterly earnings before the market opens on Friday. The street is looking for 28 cents a share out of B-of-A, while the stock has traded down year-to-date. The real interest surrounding the company involves the smackdown Bank of America was handed when the Fed rejected its planned dividend increase. While questions focus on how the bank submitted an SEC filing about the matter without the knowledge of the company's CFO or Chief Accounting Officer, the real worry is the scarlet letter of subpar capital levels. Anyway you slice it, no dividend hike is no good for shareholders.
2. Greece in Crisis, The Sequel: Have you seen this movie before? The Greek government is expected to make a detailed announcement by Friday on a new €25 billion package of austerity measures. Athens is aiming to bring its deficit to under 3% of GDP following its €110 EU-IMF bailout last year. Fears that it will have to restructure its massive debt have triggered spikes in borrowing costs, with yield on its 10-year bonds rising above 13% for the first time since it joined the European Union.
3. Who's Afraid of Inflation?: A faster-than-expected rise in producer prices last month sets the table for Friday's read on how that inflation is being passed to the consumer. The March CPI is expected to tick higher by 0.4% upon its 8:30am ET release, though the key core inflation read is only anticipated at 0.2%. While the market reaction to the hot producer inflation number was muted, our senior economics reporter Steve Liesman wonders if the market will freak first and ask questions later if core CPI comes in above the estimate as well.
4. Game Over?: Video games sales plummeted yet again in March, according to data released late Thursday by the NPD Group. The 15% falloff from the same period last year far exceeded the consensus of a 5% dip. Though the release of Nintendo's 3DS came too late in the month to provide a lift, console makers are stuck in a late-cycle rut. All corners of the market have been pillaged by social games like Farmville and mobile apps like the ubiquitous and insanely addictive Angry Birds. Names to watch in Friday trading include Electronic Arts, THQ and Activision.
5. No (Debt) Ceiling for Mortgage Rates: Mortgage rates rose for the fourth straight week, pushing refi and purchase applications down at the height of the spring season. Why, you ask? Fears of inflation in the bond market and Republican wranglings over raising the debt ceiling. On top of all that, CNBC's Diana Olick reports that new Fed regulations over lending are pressuring rates further. In aggregate, it's just one big reminder of why America's favorite word when it comes to housing these days is "rent."