Economy
China's manufacturing sector has contracted for a fourth consecutive month in April, although the HSBC PMI gauge has edged up to 48.3 from 48 in March. "Domestic demand showed mild improvement and deflationary pressures eased," says HSBC, "but downside risks to growth are still evident as both new export orders and employment contracted." Given China's slowing economy, HSBC believes that the government will add to its recent stimulus.

Eurozone business growth has accelerated in April, with composite flash PMI climbing to a 35-month high of 54 from 53.1 in March. Manufacturing PMI has increased to 53.3 from 53 and services to 53.1 from 52.2. The growth was led by Germany, although French activity slowed. The bloc experienced a return to job creation, says Markit, suggesting that companies believe "that the recovery has legs and is looking increasingly sustainable." However, Markit warns about "deflationary pressures."

Portugal has sold €750M in 10-year bonds at a yield of 3.5752%, representing the return of the bailed-out country to international markets not long after Greece sold €3B in five-year bonds earlier this month. "The story is the same as the rest of Europe," writes Joe Wiesenthal. "The market believes that governments have an implied backstop from the ECB, preventing default."

Alaska's legislature has approved Governor Sean Parnell's proposal to allow the state to negotiate the export of natural gas with BP (BP), ConocoPhillips (COP), ExxonMobil (XOM) and TransCanada (TRP). The plan is to build an 800-mile pipeline to a liquefied natural gas export plant, with the project set to cost $45B-65B. The state would retain ownership of 25% of the LNG plant.

Stocks
Allergan has adopted a poison pill in the guise of a one-year stockholder rights plan following a $47B hostile takeover bid from Valeant (VRX) and Bill Ackman's Pershing Square. The plan would prevent Ackman from significantly increasing his 9.7% stake in Allergan (AGN) and it would stop Valeant from taking its offer directly to shareholders. Allergan's shares were +0.8% premarket after soaring 15.25% yesterday.

Gilead's Q1 net profit more than tripled to $2.23B, boosted by sales of $2.27B for the company's new blockbuster Hepatitis C pill Sovaldi. The figure beat expectations by over $1B in what appears to be the biggest ever start for a drug. Gilead's (GILD) overall revenues almost doubled to $5B and EPS of $1.48 beats by $0.58. Shares were +3.9% premarket.

Lockheed Martin has won an order from Australia for 58 F-35 Joint Strike Fighters in a deal worth $11.6B, making the country one of the largest international customers for the plane. The deal comes as Lockheed Martin (LMT) faces governmental budget restrictions across the world, which has prompted countries to cut back their orders for the F-35.

Apple's FQ2 earnings are due out after the bell, with analysts estimating that EPS rose to $10.18 from $10.10 and that revenue slipped 0.2% to $43.53B. Canaccord's checks suggest that iPhone sales slowed in April due to competition and iPhone 6 anticipation. Still, many expect a dividend hike and hopes are high for the iPhone 6. Susquehanna's checks lead it to believe that Apple (AAPL) is asking for 20-30% more capacity from suppliers relative to the iPhone 5 and 5S launches.

Facebook, Qualcomm and Texas Instruments are also among the deluge of companies due to report earnings today. Analysts expect that Facebook's (FB) Q1 EPS doubled to $0.24 as revenue grew 62% to $2.36B; Qualcomm's (QCOM) EPS is seen rising to $1.22 from $1.17 a year earlier and its revenue 5.8% to $6.48B. Texas Instruments' (TXN) EPS is forecast to have climbed to $0.41 from $0.32, with revenue up 2.5% to $2.96B.

AT&T's Q1 net profit slipped to $3.65B from $3.7B a year earlier as adjusted EPS of $0.71 topped consensus and revenue grew 3.5% to $32.47B. AT&T (T) added 1.06M wireless subscribers, including 625,000 smartphones and tablets in "postpaid" plans. The carrier's new "Next" pricing program, which charges customers for devices separately from their wireless plans, proved popular, and was a factor in the company increasing its FY revenue guidance. However, shares were -2.2% premarket.

Duke Energy estimates that its plans to address coal ash in North Carolina will cost $2B-$2.5B. Duke (DUK) said it is taking "full responsibility" for the February incident in which as much as 39,000 tons of coal ash spilled into the Dan River.

Today's economic calendar:

7:00 MBA Mortgage Applications
9:00 PMI Manufacturing Index Flash
10:00 New Home Sales
10:30 EIA Petroleum Inventories
1:00 PM Results of $35B, 5-Year Note Auction

Notable earnings before today's open: ABG, AMTD, APD, APH, ARMH, AVY, BA, BABY, BCC, BEAV, BIIB, BPOP, CFR, CLS, DAL, DOW, DPS, EAT, EMC, ENTG, ERIC, EVR, FDML, GCI, GD, GNTX, GRA, HERO, IR, JAKK, JCI, KNX, LECO, MAN, MDCO, MKTX, MTH, NEO, NOC, NOR, NS, NSC, OC, OCR, PB, PG, PII, PX, R, RAI, RES, SEIC, SIX, SVU, TDY, TEL, TMO, TUP, WAB

Notable earnings after today's close: AAPL, AHL, AIZ, ALGN, ALGT, ANGI, ASGN, AVB, AWH, BRKL, CAKE, CBI, CCI, CHDN, CLB, CLW, CSGP, CTXS, EFX, ELY, ETFC, FB, FFIV, FIO, FLS, FNB, FOE, FR, FTNT, GGG, GHL, GRT, HAWK, IM, INFN, KALU, KFN, LOGI, LPLA, LRCX, MKSI, NEU, NOW, NXPI, OII, ORLY, PEI, PLCM, QCOM, QDEL, RE, RHI, RJF, RMD, SCI, SFG, SLG, SPNC, SUSQ, SWY, SXC, SYA, SYK, TAL, TCBI, TER, TILE, TQNT, TSCO, TXN, TYL, USTR, VAR, XLNX, ZNGA