Apple dragged down the Nasdaq. The tech index fell 1.1 per cent, a drop almost entirely accounted for by Apple. The S&P 500 closed up 0.2 per cent at 1,409.28 (Reuters).
Deutsche failed to recognise up to $12bn in mark-to-market losses on a giant derivatives position during the crisis, three former staff have claimed. “All three allege that if Deutsche had accounted properly for its positions – worth $130bn on a notional level – its capital would have fallen to dangerous levels during the financial crisis and it might have required a government bail-out to survive” – (Financial Times). Deutsche said the allegations were “wholly unfounded” and “stem from people without personal knowledge of, or responsibility for, key facts and information”. The former employees allege that the overstatement of trading marks centred on a portfolio of “leveraged super senior” trades (Financial Times).
Apple shares suffered their biggest one-day fall in four years. Apple’s stock closed down 6.4 per cent at $538.79, losing $34bn in market value. It remains up 33 per cent for the year. On Wednesday Nokia secured a deal with China Mobile to carry its Lumia 920T smartphone in the Chinese market. An arrangement with China Mobile has so far eluded Apple (Bloomberg).
Citi will take a $1bn pre-tax charge on cutting 11,000 jobs worldwide. The layoffs, presented as a “repositioning” by Citi chief executive Michael Corbat, amount to 4 per cent of the bank’s workforce. “We have identified areas and products where our scale does not provide for meaningful returns,” Corbat said. Reorganisation around the job cuts will lead annual revenues to fall by less than $300m, Citi said (Reuters).
The SEC’s trading and markets director and its general counsel are leaving their posts. Robert Cook headed the regulator’s trading division and led its review of the 2010 flash crash. Cook’s departure comes amid a general regime change as its chairman, Mary Schapiro, prepares to leave next week (Wall Street Journal).
FURTHER FURTHER READING
- “There will be no comeuppance in yields if the government eliminated the debt ceiling.”
- Warren Buffett has lunch with the New Yorker.
- Conference calls are horrible, Brazilian prisoner edition.
- The huuuge Freeport-McMoran deal, dissected.