04 Apr 2012: Equities slide, GE downgraded by Moody’s

  • Equities slide: Equities have slid after Fed Reserve dashed hopes of monetary stimulus (QE3) in the US. A disappointing Spanish bond auction has also encouraged a selling trend. US bond yields have fallen 4bp after rising sharply in the last trading session.
  • Stocks: FTSE All World  is down 0.9%, and FTSE Eurofirst is down 0.8%; In Asia, FTSE Asia Pacific has lost 1.5%, while Tokyo slumped 2.3%; S&P 500 is expected to be down 0.8% at open; FTSE 100 is down 1.19% today at 5768.
  • Currencies: Euro is down 0.5% against Dollar and is at $1.3166; Sterling has lost against dollar and is at 1.5863
  • Debt: US 10-years fall to 2.25%; 10-year Bunds at 1.83%; 10-year Gilts are at 2.20%
  • Commodities: Brent Crude falls to $124.28/barrel; Copper loses 1.5% to $3.86/pound; Gold falls 0.9% to $1631/ounce
  • China to let in more foreign investment: In a move to loosen strict controls over markets and to internationalise Remnibi, China have tripled the amount of money that foreign institutions can invest. The figure has gone up from $30bn to $80bn in China’s onshore capital markets. China’s premier recently declared that they needed to create competition for domestic banks for whom ‘profits come too easily’.
  • Tepco faces revolt over price rise: Tokyo Electric Power have faced strong revolt after they were set to increase electricity prices. This highlights Japan’s problem in deciding between price increase or restarting Nuclear Plants after last year’s disaster. Tepco is seeking a rise of almost 17% in prices, but so far, only 20% of its customers have agreed to this. Tepco is attributing this price rise to increased natural gas imports this year, after it lost many of its Nuclear plants.
  • Moody’s downgrades GE: General Electric has suffered a downgrade in its credit rating owing to ‘over-reliance on short-term funding’, Moody’s has said. The rating has been cut two notches to A1.
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