FT markets round-up: “The S&P 500 on Wall Street returned from the Labor day holiday to register a decline of 0.1 per cent, weighing on European markets, where the FTSE Eurofirst 300 fell more than 1 per cent. When an earlier 0.4 per cent retreat for the Asia-Pacific region is added – led by a 0.8 per cent loss for Shanghai – this left the FTSE All-World index in the red 0.5 per cent. Commodities were muddled, with copper up 0.3 per cent to $3.47 a pound but Brent crude was off 1.3 per cent to $114.18 a barrel. Meanwhile fixed income “havens” were under pressure, pushing Treasury yields up 3 basis points to 1.57 per cent, suggesting pockets of risk appetite remain. Some stock market bulls may have expected a different reaction from news that the US ISM manufacturing survey had come in weaker than expected at 49.6.” (Financial Times) Read more
The August US light vehicle sales numbers from Autodata were released earlier this afternoon, beating expectations:
One of the small mercies of the financial crisis is that Ben Bernanke’s years of studying of the Great Depression have not gone entirely to waste.
But, as Deutsche Bank’s Jim Reid, Nick Burns and Stephen Stakhiv note in the bank’s latest annual long term asset return study, we may be reaching the limits of what past lessons can tell us about the present: Read more
It was a PMI surprise, with UK service sector data appearing from Markit Group just before the close of trading in London on Tuesday.
It shouldn’t have happened. The original release was scheduled for Wednesday at 09.30am, but due to a Reuters Instant View error the number was outed on Tuesday at 1600. Read more
The performance of the Soybean future since the 1990s:
We are having a financial fragmentation heavy Tuesday so far — not surprising really considering it is one of the things that may allow Draghi-day to meet market hopes.
From the FT earlier: Read more
Live markets commentary from FT.com
An ever larger number of voices (FT Alphaville included) are exploring alternative theories to explain our current crisis, many of which focus on the role of technology, productivity and sustainability.
One conclusion is that society (or at least one part of it) is finally experiencing what has long been theorised about as the steady-state economy. Read more
The unravelling of the eurozone’s financial integration is continuing apace. New data on divergent lending rates between core and peripherals countries showing how re-alignment of banking along national boundaries has contributed to the European Central Bank losing control of the interest rate mechanism.
Noting that convertibility premia is now a declared motivation for the ECB’s expected new bond-buying programme, JP Morgan’s Flows & Liquidity team have compiled a composite Eurozone disintegration measure: Read more
Elsewhere on Tuesday,
- Why we can’t grow ourselves out of this crisis. Read more
Eurozone lending rate divergence grows: Interest rates paid by companies in the eurozone’s weaker economies have surged, highlighting the bloc’s fragmentation as the ECB loses control of borrowing costs. ECB data on Monday showed Spanish small businesses face the highest bank borrowing costs in almost four years – while interest rates paid by German rivals are at record lows. (Financial Times) A last minute round of shuttle diplomacy is underway ahead of Mario Draghi’s announcement on Thursday, with EU president Herman Van Rompuy traveling to Berlin for talks with Angela Merkel today and Mario Monti welcoming Francois Hollande to Rome. (Bloomberg)
Montreal-based Valeant Pharmaceuticals has agreed to buy Medicis Pharmaceutical for $2.6bn. Valeant will pay $44 a share for Medicis, which is a 39% premium to the company’s shares as of Friday’s close, the company said Monday. (Wall Street Journal) Read more