Good morning New York,
FT ALPHAVILLE
BoJ sees good things, everywhere...: It's been a big day for the Bank of Japan, notes Kate, which has just announced it will increase the monetary base at an annual pace of about 60-70 trillion yen, and also bumped up its inflation and GDP forecasts. For more on the key numbers read Kate's post here.
Chinese leaders are worrying about financial risks: China's Politburo Standing Committee, the country's top decision-making group, held a special session yesterday to discuss the economy, which was the first time they've held this sort of economy-focused meeting since 2004. Kate observes the official statement seems to focus on risks beyond growth, such as the quality and profitability of growth than downward pressure on growth itself.
Counterintuitive insights that are only making the mainstream now: Izzy is a bit shocked to discover that some analysts have only just picked up on the asset shortage issue. She tallies up some other counterintuitive insights that people might still be missing -- mainly the influence of hoarding and technology.
NEWS
Japanese consumer prices fell the most in two years in March. Consumer prices excluding fresh food fell 0.5% from a year earlier, compared to economists' consensus expectations of 0.4%. (Bloomberg)
Merkel's interest rate comments highlight European divide: Germany in isolation probably needed higher interest rates, Angela Merkel said, in an unusual intervention just a week before many expect the ECB to cut its main interest rate. German officials normally avoid talking about interest-rate decisions to avoid the appearance of interfering with the ECB's independence. (Financial Times)(Wall Street Journal)
Spain expected to turn away from austerity: Mariano Rajoy's government is expected to lay out an agenda that tilts away from austerity, with less-stringent deficit targets and greater emphasis on spurring growth. Rajoy will announce reforms that a government source called "a specific, comprehensive and credible", which he wants implemented by 2015 in order to gain leeway from the EU on cutting its deficit. (Wall Street Journal)(Reuters)
Soros Takes Stake in JC Penney: Financier George Soros has bought a 7.91 per cent stake in the US retailer, according to regulatory findings, a vote of confidence in the beleaguered retailer as it tries to reverse a deep decline in sales. (Wall Street Journal)
Fiat weighs IPO after absorbing Chrysler: The Italian car maker is hoping to buy full control of Chrysler and then launch a US share offering of the combined company to replenish its balance sheet, people familiar with the matter said. (Wall Street Journal)
CBOE outage lasts several hours: "A software glitch knocked out trading on the largest US options exchange for more than three hours Thursday, raising fresh questions about the reliability of critical elements of the financial market." (Wall Street Journal)
Amazon grows and spends: The online shopping giant posted a 22 per cent rise in revenue for the first quarter, a slower pace than a year earlier. Net income for the first quarter fell 37 per cent, and operating profit margin remained stubbornly thin, a reflection of heavy spending on content acquisition for the company's streaming video business, the buildout of new distribution centers and the continued development of devices, like its Kindle Fire tablet. The company also upped its spending by 22 per cent. (Wall Street Journal)
SFO launches criminal probe into ENRC: The announcement came days after founding shareholders said they were weighing up plans to take the Kazakh-based miner private. "People familiar with the investigation told the Financial Times that the agency had first begun an official probe into ENRC before its potential restructuring was announced last week." Two internal investigations were already under way after whistleblower allegations about assets in Kazakhstan and Africa. (Financial Times)
Some US banks support Europeans against capital rules: European banks have won support from some US rivals, including JP Morgan, in fighting the Fed's proposal to force US subsidiaries of large foreign banks to hold more capital. However Bank of America, Citigroup and Morgan Stanley have told US officials that they support the moves, despite concerns about a breakdown in regulatory harmony. (Financial Times)
US regulators want swift replacement of Libor: Regulators including the Fed and the Treasury said on Thursday that alternative rates "anchored in observable transactions" should be identified "promptly" by international officials and market participants. (Financial Times)
Research suggests Google searches predict markets: People do more searches on terms such as "stocks", "portfolio" and "economics" when they are worried about the state of the markets. (Financial Times)(Paper)
Samsung Electronics' Q1 earnings slightly exceeded expectations, but its shares slipped as the world's biggest technology group by sales reiterated its cautious outlook for the global smartphone market. (Financial Times)
Markets: European stocks were easing back after a mixed showing in Asia, as lingering global growth concerns put assorted "risk" assets under pressure, cancelling out support provided by recent corporate earnings and ongoing central bank aid. Currencies were in focus, with traders of the yen, euro and US dollar in particular having a number of crucial policy and data catalysts to contend with. The FTSE All-World equity index was down 0.1 per cent as the FTSE Eurofirst 300 dipped 0.4 per cent, the Asia-Pacific region lost 0.1 per cent, and as US index futures suggested Wall Street's S&P 500 would lose 1 point to 1,584. Early attention has been on the yen, which was gaining 0.7 per cent to 98.58 versus the dollar, after the Bank of Japan left policy unchanged, reiterating it will buy assets at a rate of Y60tn-Y70tn per year in order to double the monetary base.
