- Nokia (NOK) is in talks to buy Alcatel-Lucent (ALU) in a deal that would create a group worth around 40 billion euros ($42 billion). The Finnish and French companies said in a statement that at this stage there was no certainty that a merger would go ahead. Shares in Alcatel, a company which is worth about 11 billion euros ($11.6 billion) in total based on Monday's closing share price, rose 14% on Tuesday morning. Shares in Nokia, worth about 29 billion euros ($30.59 billion) before Tuesday's announcement, dropped by 6%.
- Greece is preparing to default on debt if talks with its creditors fail, the FT reports. The leftist government has decided not to pay a tranche of more than $2.5 billion that becomes due to the International Monetary Fund (IMF) in May if it cannot persuade the creditors to give it more money, the paper said quoting sources familiar with the government's thinking. The paper said the warning could be a negotiating tactic by the government, but it also highlights the fact that the state's coffers are empty.
- The Chinese central bank signaled to commercial banks to lower their short-term interest rates on Tuesday, by lowering its guidance on seven-day reverse repurchase (repo) agreements. The benchmark seven day repo rate opened at 2.81%, 47 basis points below the previous close of 3.28%.
- The price of oil will not recover this year, in the opinion of Venezuela's President Nicolas Maduro, who blamed the U.S. for the fall in prices. "This year there's no recovery in oil prices forecast. We've done everything but unfortunately the incorrect strategy of President (Barack) Obama's advisers has led to fracking.... flooding the world's oil markets," Maduro said in a speech at a military event.
- European banks could find themselves in the position of having to pay some of the people who borrowed money from them, as interest rates fall in negative territory, the Wall Street Journal reports. This is because some interest rates are linked to Euribor, the euro interbank offered rate, which could fall below zero.
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Cisco blamed its light guidance on macro headwinds. But as its own numbers show, software and security spending is holding up better than hardware spending in this environment.
Stocks go higher as bump in China-trade talks turns into bounce-back, and better charts begin to emerge.
Let's review the charts of this software service company.
I think VIX is going to stay sub-14 for the rest of the month, maybe the rest of the year.