Apple shares gained the most in one day since November 2008, wiping on $50bn in market value – equivalent to the market capitalisation of Hewlett-Packard. The Nasdaq closed up 2.3 per cent, its biggest one-day gain year to date (Wall Street Journal).
Ben Bernanke has said the Fed is “prepared to do more” despite an apparent hawkish shift in FOMC members expecting rates to rise before late 2014. The FOMC statement did not change the central bank’s language of foreseeing “exceptionally low levels” in two years’ time. Fed officials upgraded growth forecasts for this year to 2.4 and 2.9 per cent, up from 2.2 per cent to 2.7 per cent in January (Bloomberg). Only four officials – compared with six in January – believe ultra-low rates will remain in place to the end of 2014 (Financial Times). “We remain entirely prepared to take additional balance sheet actions as necessary to achieve our objectives,” Mr Bernanke told the Fed press conference (Reuters).
Shareholders almost won a rebellion against General Electric. Some 47.5 per cent of votes cast were in favour of a proposal to let shareholders make decisions about the company “by written consent” (Financial Times). The proposal would have cost the board control of the power to time investor meetings.
Caterpillar warned it had overestimated Chinese construction demand. The company now expects demand to fall this year, reversing its earlier expectation for growth of five to 10 per cent. There is “too much inventory” in the country and machines will be moved to other regions, Caterpillar said (Bloomberg). The drop in sales calls into question Caterpillar’s plans for rapid expansion in China, including an additional nine facilities to open this year on top of 16 already built (Financial Times).
Lloyd Blankfein said he has no plans to step down, in a pair of rare media appearances. “We haven’t gotten everything right in how we deal with the public,” Goldman’s chief executive told CNBC in his first TV interview in two years (CNBC). Blankfein told Bloomberg TV that Goldman’s poor first-quarter results were the consequence of a “lower third-quartile opportunity set” (Bloomberg).
Durable goods orders plunged 4.2 per cent, hit by transportation. Consensus had been for a 1.7 per cent drop in March. February orders were also revised down. Orders for transportation goods – in particular aircraft – fell 12.5 per cent (Reuters).
Newt Gingrich’s chances of winning the presidency also plunged, to non-existent. Gingrich will suspend his campaign next Tuesday after this week’s primary losses (Politico).
– On the US data front: initial jobless claims, pending home sales and the Chicago Fed national activity index.
– Bernanke in today’s Fed presser called out those (including Krugman) calling for temporary higher inflation. Well… Krugman’s already counter-attacked.
– Why UK “austerity” is not what it seems, via the Atlantic.
– Sober Look’s case for a quick sale of the Fed’s Maiden Lane III CMBS assets.
– Dealbreaker: Baseball players take on bankers over pay.