Friday’s Economic Calendar
- 9:55 Reuters/UofM Consumer Sentiment
10:00 Leading Indicators
10:30 ECRI Leading Index
The S&P 500 dropped from its mid-day highs to a low within a few basis points of its 200-day moving average. It then rallied during the final hour for a fractional gain of 0.18%. The S&P 500 now up 0.80% year-to-date but down 7.24% from the interim high of April 29. From a longer perspective, the index is 87.4% above the March 2009 closing low and 19.0% below the nominal all-time high of October 2007.
Global regulators are poised to set a new tiered regime of additional capital requirements for about 30 of the world’s biggest banks, in the latest effort to ensure the next financial crisis can be contained.
The regulators plan to place each institution into a “bucket” carrying a particular surcharge based on bank size, global reach, structural complexity and whether other banks could absorb its business. Banks could move between categories as their size, structure and risk appetite change.
At least eight banks — three from the US and five from Europe — are being targeted for capital surcharges of 2.5 per cent of their assets, adjusted for risk, on top of the ‘Basel III’ minimum of 7 per cent set by global regulators last year. The list is an informal effort to forge a global compromise and has not been formally circulated.
If the ideas are adopted, Citigroup , JPMorgan, Bank of America, Deutsche Bank , HSBC , BNP Paribas, Royal Bank of Scotland and Barclays would have to maintain core tier one capital ratios of 9.5 per cent, according to three people briefed on the discussions.
Goldman Sachs, Morgan Stanley, UBS and Credit Suisse would be in the next category down, facing a surcharge of 2 per cent and total minimum ratio of 9 per cent.
Pandora Media Inc. fell below its initial public offering price in its second day of trading amid concern that competition may hinder the streaming radio company’s potential for growth.
The Oakland, California-based company declined 24 percent to $13.26 as of 4:15 p.m. on the New York Stock Exchange after climbing 8.9 percent yesterday. The company raised $234.9 million in an IPO on June 14.
Research In Motion Ltd. (RIMM), its BlackBerry phones losing sales to Apple Inc. (AAPL)’s iPhone, said quarterly revenue may drop for the first time in nine years and unveiled plans to reduce jobs as competition intensifies.
The stock fell as much as 17 percent in late trading after RIM said revenue will be $4.2 billion to $4.8 billion in the fiscal second quarter. That was less than the average analyst estimate for sales of $5.47 billion, according to a Bloomberg survey. Profit this quarter will be 75 cents to $1.05 a share, the company said in a statement. Analysts had predicted $1.40.
RIM is losing market share in the U.S. to Apple’s iPhone and handsets with Google Inc. (GOOG)’s Android software, in part because it hasn’t introduced a major new BlackBerry model since August. Cheaper Google phones are also making inroads in Latin America, Asia and Europe, threatening the popularity of less expensive BlackBerry models like the Curve.
Bonus: Australian Interviewer tries out a Dalai Lama Joke with the Dalai Lama. Kinda Bombs.