FT markets round-up: “Stocks and commodities rose, helping push Wall Street back to a fresh five-year high, as stronger-than-expected Chinese trade data boosted optimism about the health of the global economy. The FTSE All-World equity index rose 0.9 per cent to 230.55, a 19-month peak. In London, the FTSE 100 pared earlier gains to close marginally higher, but still ended above the 6,100 mark for the first time since May 2008. And on Wall Street, the S&P 500 ended the session 0.8 per cent higher at 1,472.87 points, a fresh five-year peak. In Europe, the FTSE Eurofirst 300 fell 0.3 per cent, held back by poorly received results from the likes of German sugar group SuedZucker and a sharp fall in Marks and Spencer shares after the UK retailer delivered a downbeat trading update.” (Financial Times) Read more
If you wanted to see a group of British MPs not really getting why a group of former UBS execs didn’t get that a Libor scandal was raging under their watch, the only place to be was the Thatcher Room in the House of Commons on Thursday. Read more
The WSJ has news: “Bank Made Huge Bet, and Profit, on Libor“. The bank in question being Deutsche. The huge bet and profit being in 2008 on a bunch of rates trades.
Of course other banks did and do trade rates, in size, but let’s cut straight to the WSJ graphic… Read more
An interesting debate is popping up regarding the topic of capital expenditure.
Take the latest from Societe Generale’s Andrew Lapthorne and team. They argued on Thursday that the commonly held belief that companies’ capital investing ratios have been falling, whilst hoarded cash pools have been going up, is inaccurate. Read more
This is one for the list of things you intuitively know, but have never bothered to fully formulate: the “issue-attention cycle” as laid out by Anthony Downs in a 1972 issue of The Public Interest. It describes how a society travels from blissful ignorance to intense interest about a topic, only to smack into cruel reality and then transition to boredom or indifference. Read more
RIP old RPI!? Nah, we’ll just stick with the old Retail Price Index formula said the National Statistician on Thursday morning, surprising just about every analyst in our inbox and making holders of index linked gilts pretty darn happy. Yields have fallen by between 22bps and 38bps across maturities at pixel.
The ONS had four options to choose from, moving from ‘no change’ to the RPI through to ‘lots of change’. Each choice would have involved the Carli index, that most prettily named devil, which isn’t used by any other advanced economy’s statistical measures due, primarily, to its large upward bias. But, obviously, it still persists within the RPI where, according to estimates, it was worth nearly a 1 per cent bump in the measure per year. Read more
Live markets commentary from FT.com
China trade rebound hints at solid growth || UK statistical chiefs leave RPI unchanged || Stay at heart of Europe, US tells Britain || Tesco UK sales show signs of recovery || SEC enforcement chief steps down || BATS reveals multiyear pricing problem || Markets update || Alphaville Read more
Go on, pretend you’re on the governing council. Here are the data points you have to try to steer monetary policy with:
(Click to expand) Read more
Elsewhere on Thursday,
– The car is most popular, followed by the dog.
– What the cashed-up US conglomerates are up to.
– Africa maybe not growing so fast, after all. Read more
China’s December trade easily tops expectations || Asian shares rise || M&S confirms poor Christmas || BATS discovers four years of trade prices errors || Basel not so much easier on RMBS or outflows || Deutsche’s Libor exposure, detailed || SEC investigates Herbalife || FT calls for UK referendum on EU membership Read more