Chillin' out till it needs to be funded
Even as S&P 500 came back to 1354 at the close the Dow Jones rested down at 12727 after spending most of the afternoon nearer to 12750 as stocks remained bullish on Financials and hence the economy while deals in Glaxo buying Human Genome for $14 a share and the general sense of deja vu kept Utility and Healthcare stocks mostly higher There were no other bidders at Human Genome.
That rounded up the commentary in Europe as well, where good Economic news in Italy was earlier nipped by a Moodys’ downgrade and only the DAX seemed to keep its head above water. Fixed yields are snowing down to 1.4% in US and Germany and the Dollar giving up as retail sales eroded, the Back to school season lost and the Yen already trading at 78 levels after having receded to 79.21 on Friday. The Pound Sterling has moved up to 1.5650 levels and the Euro is still above 1.22
Citi made a neat jump on its $3 B profit report, lauded as the best of them since 2008and scoring on QoQ comparisons after a long time though in being flat and not in growth. Mastercard and Visa were up higher in early trading as the WTO ruling agreed China was wrong in not allowing them to process Yuan transactions in China. th epayment of $6 Bn to be made by Master and Visa will see Master pay one fifth the amount Visa is liable at $800 mln while Visa has already provided more than $3 B and banks will also be sharing the settlement burden which includes ongoing transaction fees to merchants at a lower clip to compensate for overcharging them and setting up an unfairly high fee system for transactions that had to be paid to banks /issuers.
Ben Bernanke speaks tomorrow and day after at the Congress to defend the US Economy and how the Fed can further bend to support growth even as many other forecasters joint he rush to downgrade GDP groth estimates, first fo r2012 then for 2013 as well. That means the markets will again respond to Bernanke’s comments on limits of monetary policy than the results from Tech and Financials due tomorrow