The better than expected US retail sales combined with the outcome of the Fed’s stress tests led to a strong close in the US with equity markets closing at multi year highs. In Asia equities followed their American counterparts and rallied with the regional index the MSCI set for its highest close in two weeks.
The latest round of stress test’s on US banks paves the way for dividends to enable the backs to return cash to shareholders. 15 out of 19 institutions passed the tests, with the US central bank confirming that the majority had ‘sufficient capital buffers’ to withstand a fresh global crisis. Surprisingly one of the worlds largest banks Citigroup, was part of the four that failed, which surprised analysts that sent it shares tumbling. (The other 3 banks to fail were Ally, Metlife and SunTrust)
As risk appetite returned to the market Gold futures moved lower for the third successive session.
Standard Life beat analyst expectations with strong earnings, 28% increase on 2011 helped by cost cutting and strong performance from its Canadian division.
The FSA fined Head of European Credit Sales at Credit Suisse in London, Nicholas Kyprios personally £210,000 for “impropper market conduct” by disclosing confidential client information ahead of a significant bond issue in Novemeber 2009. Kyprios will keep his job at Credit Suisse, but the enforcement comes after a few high profile fines and investigations as the FSA shown its regulatory force.
UK Chancellor George Osborne is looking to launch a 100-year debt issue. The “Osoborne bond” (FT) is to take advantage of the country’s historically low interest rates (currently at 0.5%).
Rating agency S&P believe that the Greek solution is just “kicking the can further down the road”
Snapshot of Headlines:
Deutsche to cull 1,000 jobs in its investment bank – CityAM
Car loans speed up at Close Brothers - Financial Times
Risk provisions cut into German Central Bank profit – Wall Street Journal
Vince Cable to step up his war on ‘fat-cat’ pay – The Daily Telegraph
FSA Chief says consumers are being hoodwinked. His accusations are at parts of the Square Mile for developing complex products that mislead regulators and hoodwink consumers – The Times
Apple drives record $1.24 Trillion of company cash - Bloomberg.com
We are calling the FTSE 100 to open +20 points this morning.