29 May 2012: Stocks recover, JP Morgan in insider trading probe

  • Stocks recover on Chinese optimism: After a bearish last week, markets are looking look towards a bullish mood on positive data from China.
  • Stocks: FTSE All World is up 0.5% as FTSE Eurofirst attracts buyers and rises 0.9%; In Asia mood improved as FTSE Asia Pacific gained 1.2%; S&P 500 rallies 0.5%; FTSE 100 continues to gain with 0.65% today and is at 5391 after it had a shocker on Wednesday, losing over 2.5%
  • Currencies: Euro is almost at a 2-year low and lost 0.5% over the day against Dollar at $1.2469; Sterling against dollar is $1.564
  • Debt: German Bunds are up 1bp to 1.37%; US 10-years drop 3bp to 1.71%
  • Commodities: Brent Crude has lost 0.38% on the day to $106.7/barrel; Copper gains 1.4% today to sit at $3.50/pound; Gold lost 1.1% at $1554/ounce
  • Economists cut Indian growth forecast: Goldman Sachs and BofA Merill Lynch today cut India’s growth outlook. GS group revised their forecast (for the fiscal year ending March 2013) from 7.2% to 6.6% while BofA settled for 6.5%. The fiscal and the trade deficit are rising and are at 5.8% and 9.9% of the GDP, while inflation is in double digit figures. The industrial output contracted 5.3% in March, and exports have gone down too.
  • German inflation fall provides boost: Inflation in Germany has eased off more than expectations to below 2%. This can give ECB the option to cut interest rates. Thursday’s data will reflect on inflation in eurozone which is expected to have eased to below 2.6% of last month. A cut in the interest rates from ECB will aid the periphery countries where banks are heavy users of ECB loans.
  • JP Morgan in insider trading in Japan: JP Morgan has suffered another blow as one if its employee leaked sensitive information to a hedge fund in Japan. JP Morgan has been in talks with the Japanese regulator about the leak of information about the issue of a new share by Nippon Sheet Glass before its announcement in August 2010.
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