The Dow Jones Industrial Average posted its highest close since December 2007. The S&P 500 closed at its highest level since May 2008 (Wall Street Journal). March’s ISM beat forecasts of 53 to post 53.4, helping to boost stocks. The ISM’s employment reading of 56.1 was the highest since last June (Financial Times).
Coty ‘bear-hugged’ Avon, taking its $10bn takeover bid public after Avon rejected its advances. The perfume-maker has not signalled its intent to make a hostile offer, but disclosure may lead Avon’s shareholders to push for a return to talks. Recent poor results, the search for a new CEO, and a US bribery probe have left Avon vulnerable (Financial Times). Coty had been Avon’s target at the beginning of the year but the tables turned after a formal offer failed to appear (Wall Street Journal). Few other obvious suitors for Avon exist beyond Coty, analysts say (Reuters).
The CFTC has sued RBC, alleging that the bank illegally misrepresented tax-related ‘wash trades’ between its affiliates. Hundreds of millions of dollars in futures trades were executed off-exchange from 2007 to 2010 but were then reported to the OneChicago exchange as block trades, harming price discovery in the market, the regulator said (Bloomberg).
Markit acquired securities lending specialists Data Explorers, capturing another slice of the market for financial data. The price was not disclosed. The deal allows Markit further expansion into equities and fixed income, including offering its clients products to optimise their use of collateral (Financial Times).
Goldman’s next bugbear might be Fremont Home Loan Trust 2006-E, reports Stephen Gandel (Fortune Term Sheet). There’s ‘a good chance’ this $1.3bn subprime mortgage deal is the very same $1.3bn subprime mortgage deal that Goldman mentioned when warning of a Wells notice from the SEC, Gandel says. FHLT 2006-E’s pool of risky mortgages quickly turned sour shortly after being sold to investors.
FOMC minutes! Details from the 13 March meeting should tell us a bit more about how the Fed sees risks from high oil prices, and also what it thinks of recent drops in jobless rates.
Europe’s quiet ahead of Thursday’s ECB rates decision. But the Reserve Bank of Australia is likely to stay on hold at its Wednesday meeting.
Further further reading
- Deus Ex Macchiato looks over his (2011) macro trades.
- Presenting…. valueyahoo.com, Dan Loeb’s latest.
- Felix’s ‘what went wrong at Groupon?’ theory.
- Treasuries are fine and don’t price out QE3, say primary dealers to Bloomberg.
- Lego pirates of the future will be… 3-D printing, says MIT Tech Review.