June, 2009
Quote du jour, when labour stats give you lemons…
Make lemonade! That’s what Bloomberg’s done in its report of the latest US payroll figures:
Opportunity Number: 37844-001
Presented – almost – without comment:
Chief Executive, Asset Protection Agency Salary £140,000 LondonHM Treasury is establishing the Asset Protection Agency (APA) to operate the Asset Protection Scheme (APS).
Flows into emerging market equity funds hit 18-month high
Funds dedicated to emerging market equities attracted some $4bn of investor cash during the week to June 03, according to data from fund tracker EPFR.
Michael Hartnett, chief global equity strategist at Merrill Lynch,
US employers cut fewer jobs in May than forecast
US employers cut 345,000 jobs last month, significantly fewer than the 520,000 losses forecast by economists, according to data released by the Labor Department on Friday. Job loss estimates ranged from declines of 450,000 to 600,000,
LEX on the Rio salvage job
Uncertainties remain over how the Chinese may respond to Rio’s cash call, Lex noted on Friday. And there’s still the little matter of competition approval. But some sort of Rio/BHP tie-up was always the logical path to take.
Britain’s exploding pensions, redux
We’ve written about the relationship between corporate bonds and pensions fund a couple of times before, but now is probably a good time to revisit the issue, given that the credit team at Dresdner/Commerzbank have just published a pensions special.
Lunch Wrap
On FT Alphaville Friday morning,
- How the current equity rally is a function of central bank liquidity ops.
- The effects of quantitative easing on ‘real assets’.
- What recovery?
- Bearing the Brownt II.
Markets live transcript 5 Jun 2009
Markets live chat transcript for the chat ending at 12:05 on 5 Jun 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hello there PM:Welcome to Markets Live
The (QE)uropean equities rally and yields
Have a look at this chart, from Citi’s pan-European portfolio strategy team. It shows the performance of European equities and the US yield curve for the past 10 years. There’s a pretty clear trend here — when the yield curve steepens European stocks tend to fall,
John Lewis aka Goldilocks
The latest weekly John Lewis sales figures show it was just too hot for shopping. Sales in the week to May 30th fell by 8.2 per cent for the high street retailer.
As the company reported on Friday:
Exceptionally warm weather impacts on weekend footfall
Following on from such a strong run of sales during the first three weeks of May,
What recovery? (updated)
Here’s a chart on rail freight volumes in the US from John Kemp, the Reuters columnist. He reckons it’s a good proxy for manufacturing and construction activity – and it provides some indication that, despite fitful euphoria in financial markets,
Allocating the ECB’s credit easing
On Thursday the European Central Bank provided a few more details on its covered bond programme — the bank’s newest unconventional policy measure.
While buying back covered bonds is more analogous to Credit Easing than the more dramatic Quantitative Easing,
Niall Ferguson fights back
There have been economic spats before (Rogoff versus Stiglitz comes to mind), but a new one is definitely brewing in the shape of the tit-for-tat currently raging between Harvard’s Niall Ferguson and Princetonian Nobel Laureate Paul Krugman,
Bearing the Brownt – Day II
No false news shock resignation rumours on Friday morning – in fact the opposite. It looks like the prime minister is going to bring forward the Cabinet reshuffle in a desperate attempt to shore up his position,
Real assets and the debasement effect
Analysts at Standard Chartered became the latest to caution over the potential effects of global quantitative easing on ‘real assets’ on Friday. In a note the bank’s FX team write:
The debasement of money through over supply,
Further reading
Elsewhere on Friday,
- The quants must be crazy.
- Paul Wilmott: Revenge of the nerd.
- Exponentially curb your S&P enthusiasm.
- On ‘forecasting’ the jobs report.
- “Being right may be a necessary component of trader profitability,
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: UK government heads towards cliff edge
Save for a handful of cases where the claims of MPs were probably fraudulent, the uproar over expenses said as much about the state of the national psyche as about the integrity of its politics.
Snap news
Breaking pre-market news on Friday,
- Rio Tinto announces joint venture with BHP Billiton, $15.2bn rights issue –statement, statement, statement, statement, statement, statement, statement, statement.
Chinalco out as Rio plans share sale
Rio Tinto announced on Friday that it will raise $15.2bn from a rights issue and share prized assets with rival BHP Billiton after Chinalco – the Chinese state-owned aluminium company – abandoned its controversial investment in the Australian miner.
Rio Q1 profit falls
Rio Tinto made an unaudited net profit of $1.6bn in the first quarter, compared with $2.94bn a year ago, the miner said on Friday as it announced a $15.2bn rights issue and a deal to share assets with
GM to finance Delphi buyout
General Motors has agreed to finance a private-equity firm’s buyout of bankrupt auto-parts company Delphi, after itself filing for bankruptcy protection earlier this week, reports the WSJ. GM, which received $30bn in US government funds,
Fed dismisses Tarp objections
US regulators insisted that JPMorgan Chase and American Express raise equity this week before repaying bail-out funds, despite objections from the banks, which claimed they did not need the money. The Fed imposed the requirement on JPMorgan and Amex because they were the only institutions that had passed recent “stress tests” but had not yet raised equity,
SEC charges Countrywide chiefs
America’s SEC filed civil fraud charges on Thursday against Angelo Mozilo, the former Countrywide chief executive, and his two top lieutenants, alleging that they misled investors about the financial condition of the mortgage company in the months before its sale to Bank of America.
AIG to raise $988m from Transatlantic
AIG may raise $988m selling shares in reinsurer Transatlantic Holdings, reports Bloomberg. The stricken US insurer was forced to scale back plans to sell units in their entirety as the recession eroded the value of insurance assets and made financing costlier for potential buyers.
ICBC in deal to expand into Canada
Industrial and Commercial Bank of China, the world’s largest bank by market value, said on Thursday it would purchase 70% of Bank of East Asia’s Canadian unit. Under the deal, ICBC will pay HK$567m ($73m) for the stake,
Santander plans €2.5bn offering
Santander, the eurozone’s largest bank, has joined the queue of Spanish banks planning to issue billions of euros of preference shares to strengthen capital ratios and liquidity. Santander is seeking permission from the market regulator to issue up to €2.5bn ($3.5bn) of preference shares.
Sberbank to sell on stake in Opel
Russia’s Sberbank plans to sell its stake in Opel to another Russian investor, its chairman said on Thursday. German Gref said that his bank and Canadian parts supplier Magna would commit €500m ($710m) to General Motors’ spun-off European business but that Sberbank would later sell its stake.
KB poised for $2bn cash call
The parent company of Kookmin Bank, one of South Korea’s leading lenders, has hired investment banks to assist with a $2bn-plus capital raising. The move will fuel speculation that Kookmin is amassing a war chest to bid for Korea Exchange Bank,
Trichet defends ECB independence
The head of the ECB on Thursday stressed the bank’s “fierce independence” in a thinly veiled rebuke to Angela Merkel after the German chancellor accused it of bowing to international pressure. Jean-Claude Trichet said he and Merkel had spoken on Wednesday and she had respected the ECB’s freedom to act.
Third minister quits in UK political crisis
Gordon Brown was on Thursday night fighting for his political life after a third cabinet minister resigned as the polls closed on local and European elections expected to inflict a drubbing on Labour. James Purnell became the first cabinet minister to call openly for Brown to go,