The (early) Lunch Wrap | FT Alphaville

The (early) Lunch Wrap

Good morning New York…

ALPHAVILLE

Eurogloom: Some stagnant unemployment stats out of Eurostat on Tuesday. Paul’s post has the rather dismal breakdown and the shocking news that Europe is generally stuck at home, binging, boozing, smoking fags and generally going nowwhere.

Soros vs Sinn: Hans-Werner Sinn — he of Target2 imbalance fame — had a piece on Project Syndicate last week in which he stood firm against George Soros and his demands for Germany to leave the euro if it continues to block the introduction of Eurobonds. He also accused Soros of not recognizing the real nature of the eurozone’s problems which he said were cheap credit, loss of competitiveness and a distinct unwillingness to take responsibility for previous bad decisions. As Izzy noted, Soros was not impressed and got his pen back out.

Sin City, SEC edition: And so to Victorville. Nothing to do with FT Alphaville maybe winning some debate, but a real live city, east of LA, beyond the mountains where the desert starts, near Apple Valley. It’s what American friends would call an “ex-urb”. Paul picked up on Monday’s news that the SEC charged the city itself with defrauding municipal bond investors. That’s the entire city. This smacks of Scapegoatville.

NEWS

US expects first debt cut since 2007: “The US Treasury expects to pay down debt in the second quarter of 2013 as the budget deficit that has dominated national politics starts to shrink.” (Financial Times)

“Federal prosecutors launched a criminal investigation into whether corporate directors misused government-sanctioned trading plans to sell company shares for investment funds they run. The U.S. attorney’s office for the Eastern District of New York issued subpoenas requesting information from companies and funds cited in an April 25 page-one article in The Wall Street Journal that highlighted trading at three companies by directors who also run funds, a person familiar with the probe says.” (Wall Street Journal)

Luxembourg to share company bank details: Luc Frieden, finance minister, said Luxembourg was willing to expand the number of accounts covered by new information-sharing agreements with the US and the EU to include global companies. The accords, agreed this month, currently only cover individual taxpayers. (Financial Times)

BP beats expectations despite post-Deepwater disposals: BP turned in first-quarter results that beat market expectations by $1bn, thanks to rising production in high-margin areas and a strong contribution from its trading arm. First-quarter profit was $4.2bn, down 9 per cent on a year ago. Consensus estimates had put first-quarter profit at $3.27bn. (Financial Times)

Japan manufacturing PMIs grow faster and consumer spending rises: The Markit/JMMA Japan PMI rose to a seasonally adjusted 51.1 in April from 50.4 in March — the fastest rise since March 2012. (Reuters) Five months after Shinzo Abe, Japan’s new prime minister, launched “Abenomics”, his push to boost growth is being felt on shop floors across the nation. Data released on Tuesday showed that household spending rose 5.2 per cent in March, its highest year-on-year growth in nine years. (Financial Times)

Letta’s push in Italy: Enrico Letta, Italy’s new centre-left prime minister leading an unprecedented grand coalition, cancelled planned tax rises worth up to €6bn in a clear break with the policies of his technocrat predecessors. Laying out his programme in his first speech to parliament, Mr Letta said Europe faced a “crisis of legitimacy” and had to change its focus on austerity. He said he would visit Berlin, Brussels and Paris this week to press his case. (Financial Times)

Cyprus announces plans to cut down on graft and reform its political system, ahead of today’s vote on the €10bn international bailout. (Financial Times) Greece approved the firing of permanent civil servants in a fast-tracked ‘omnibus’ bill on Monday, opening the way for eurozone officials meeting in Brussels to release a €2.8bn aid tranche the same day. (Financial Times)

Greek firms dip back into bonds: “The Greek economy is still struggling, but with loans hard to find companies are taking advantage of investor demand for high yields by issuing bonds. Since the Greek economy went into a tailspin in 2010 and the government-debt restructuring in March last year, corporate-bond sales have dried up.” But now companies such as Hellenic Petroleum and Frigoglass are testing the yield hungry waters. (Wall Street Journal)

France plans to cut its armed forces headcount. (Financial Times)

Alfredo Sáenz resigns as Santander chief ahead of legal ruling: The chief executive of Banco Santander, the eurozone’s biggest bank by value, has resigned ahead of a decision by Spain’s financial regulator over whether he should be banned from banking because of a criminal conviction. (Financial Times)

Abu Dhabi-UK clean energy investment talks: Abu Dhabi is in talks with the UK government to invest up to £1bn in alternative energy schemes alongside the state-owned Green Investment Bank.

Deutsche Bank bites bullet on stock: The bank “said it would raise €2.8 billion ($3.65 billion) in fresh capital, giving in to months of pressure from investors and regulators to improve its capital base.” (Wall Street Journal)

Kodak’s UK pension fund gets old film assets: Eastman Kodak is to offload its outdated camera film business and other assets to British pensioners in return for erasing an estimated $2.8bn of claims. The groundbreaking plan has been agreed by UK pension fund trustees, and would help the company begin extricating itself from Chapter 11. (Financial Times)

Markets: Equity investors are exhibiting few signs they are preparing to “sell in May and go away”. The final day of April sees global stocks at their best levels in nearly five years, while Wall Street perches at record highs, as traders infer that the world’s monetary guardians will continue to intervene to support assets should economic growth wane. The FTSE All-World equity index is up 0.2 per cent to 242.3, its highest since June 2008, after the Asia-Pacific region climbed 0.8 per cent and as the FTSE Eurofirst 300 opens with a 0.4 per cent gain. US index futures suggest the S&P 500 will hold its overnight closing high of 1,594 writes the FT’s Global Markets sensei Jamie Chisholm.