US stocks went off to the races. The S&P 500 rose 1.4 per cent to close at 1,416, its highest level since May 2008 (Bloomberg). A speech by Ben Bernanke signalled that the Fed remains loath to withdraw stimulus too quickly before late 2014, helping to bolster equities further (Reuters).
The speech gave the Fed chairman’s first comments on jobs and growth since the unemployment rate’s drop to 8.3 per cent (Financial Times). The comments were not wildly optimistic, however. “We cannot yet be sure that the recent pace of improvement in the labor market will be sustained,” Bernanke warned (Wall Street Journal). Adjustment “can be supported by continued accommodative policies,” the chairman added (Bloomberg).
Banks continue to complain about the Fed’s stress tests. Two conference calls last week were filled with bankers’ questions about why the Federal Reserve estimated lower levels of capital than suggested by their own forecasts (Wall Street Journal). The Fed’s core methodology for the tests remains undisclosed.
An IPO of Ally Financial looks ever less likely. Treasury officials have told Ally that they prefer a sale or break-up of the bailed-out lender, given problems presented by its poor stress-test performance, ‘and the potential bankruptcy of a mortgage unit’ (Bloomberg.) The Treasury’s plan involves splitting Ally’s auto loans unit and its online bank. It owns 74 per cent of the former General Motors lending unit.
BATS carried out damage control on Friday’s abortive, glitch-ridden IPO. Joe Ratterman, its chief executive, nevertheless stopped short of agreeing with BATS’ largest shareholder that all bonuses at the company should be halted (Financial Times). BATS’ share of daily US share trading rose on Monday to 10.6 per cent, from Friday’s 9.2 per cent, but is below its one-month average (Bloomberg).
Yahoo has given up trying to keep documents related to Microsoft’s 2008 bid sealed. The documents were filed as part of shareholder litigation against Yahoo. Third Point’s Dan Loeb, a thorn in Yahoo’s side, has called the failure to take Microsoft’s $31-a-share offer one of the company’s failures (Dow Jones).
January’s S&P Case-Shiller index lands at 9am EST. The Conference Board’s March consumer confidence index arrives at 1045am EST. Bloomberg reckons it will hold at 70, after posting a one-year high of 70.8 last month (Bloomberg).
Ben Bernanke’s third lecture in the George Washington University series starts at 1245pm. This one leaves history behind and focuses on the Fed’s response to the recent crisis, so it could be interesting.
Further further reading
– Matt Yglesias at Slate calls Ben Bernanke ‘Eeyore’.
– Epic Dealbreaker comment thread: names for Greg Smith’s book.
– SecondMarket, from private stock to… bankruptcy trade claims?
– We’re running out of positive economic surprises, Sober Look says.