Full article

Comments »

The ECB cuts rates for lending, refinancing, while keeping deposit rates at zero.

European markets had no interest and have sold off since the decision.

Full article

Comments »

“Expect Labs has already received funding from the likes of Google Ventures and Greylock Partners, but the San Francisco-based startup (and TechCrunch Disrupt alum) announced this morning that Intel Capital, Samsung Ventures, and Telefonica Digital have made their own strategic investments in the company.

In case you haven’t been keeping tabs on Expect Labs, well, you should be. It was founded by Tim Tuttle and Moninder Jheeta in 2011, and since then the team has been tackling a hefty problem — they want to be able to listen to and analyze your conversations as they happen, and surface relevant information right at the moment you need it without you having to search for it.

Granted, some of these new strategic partners are more surprising than others. Our own Jordan Crook sat down with Intel Capital president Arvind Sodhani back in March, who revealed that the chipmaker’s venture arm had indeed invested in Expect Labs and strongly hinted that Intel would lean on the startup’s Anticipatory Computing Engine to bring what Intel refers to as “sophisticated voice control” to ultrabooks. Tuttle naturally wouldn’t confirm whether ultrabooks in particular would soon benefit from Expect Labs tech, but noted that Intel is “trying to develop more expertise in software” and realizes that voice, touch, and gestures will become dominant modes of interaction with new devices.

At first glance, Samsung’s interest in Expect Labs and its thoughtful approach to surfacing information seems like a no-brainer. As seen in blockbuster devices like the Galaxy S4, the Korean electronics giant has sought to stay at the front of the smartphone pack by packing its smartphones full of first-party software like the S Voice assistant. That sort of approach hasn’t always been very well-received, but baking the ability to chew on conversations and spit out information on subjects users have just spoken about into yet another Samsung app would be a very savvy move for a company that’s continually looking to push the envelope on software. It’s not just smartphones that will benefit either — Tuttle specifically calls out smart TVs as a potential recipient of Expect Labs tech.

Telefonica seems like a much more interesting case — it’s the fifth largest mobile network operator in the world with roughly 315 million customers across Europe and the Americas. To date Expect Labs has shown off the proactive power of its Anticipatory Computing Engine in app form, but that sort of approach simply wouldn’t work for many of Telefonica’s subscribers since a considerable chunk of them in developing and mature markets don’t own smartphones…..”

Full article

Comments »

“Dividend stocks are soaring, thanks to the Federal Reserve’s low interest-rate policy, and some experts wonder whether these stocks are becoming overvalued.

For example, Procter & Gamble carries a 3.1 percent dividend yield and is expected to register earnings-per-share growth of 6 percent this year. Meanwhile Google has no dividend, but is expected to produce earnings growth of 18 percent this year.

So which stock has the higher price-earnings ratio? P&G at 18. Google’s ratio is 16.6.

It’s all about the dividend. Many slow-growing companies with dividends are receiving more attention from investors than fast-growing companies without dividends are.

“You have these tech companies that have double-digit earnings growth, no debt, huge cash balances and they’re trading at 12 times forward earnings, while you have a utility in Ohio at 16 times earnings,” James Swanson, chief investment strategist at MFS Investment Management, told The Journal.

“If you don’t think there’s a recession coming, how far do you go with this game?”

The boost in valuations of dividend companies, sparked by yield-hungry investors, is “the biggest glaring discrepancy I see in the market,” he said.

Donald Taylor, a portfolio manager at Franklin Templeton Investments, believes this price discrepancy will last for a while.

“The macro environment that has caused utilities and telecoms, as well as consumer staples, to be expensive relative to history … is not at all likely to change anytime soon,” he noted.

“This is not a product of equity investors buying defensive stocks and hiding out,” Chris Wallis, chief investment officer of Vaughan Nelson Investment Management, told The Journal.

“What we have is money that had typically gone to fixed income now coming into equities,” he added. “They’re looking for bond substitutes and it doesn’t mean that the money is going to exit and go either to cyclical stocks or go to cash. I think it’s going to stay where it is.”

Income-seeking investors don’t have an attractive set of choices in front of them, according to Michael Aneiro of Barron’s….”

Full article

Comments »

“Google, as many researchers know well, is more than a search engine—it’s a remarkably comprehensive barometer of public opinion and the state of the world at any given time. By using Google Trends, which tracks the frequency particular search terms are entered into Google over time, scientists have found seasonal patterns, for example, in searches for information about mental illnesses and detected a link between searching behavior and a country’s GDP.

A number of people have also had the idea to use these trends to try achieving a more basic desire: making money. Several studies in recent years have looked at the number of times investors searched for particular stock names and symbols and created relatively successful investing strategies based on this data.

A new study published today in Scientific Reports by a team of British researchers, though, harnesses Google Trends data to produce investing strategies in a more nuanced way. Instead of looking at the frequency that the names of stocks or companies were searched, they analyzed a broad range of 98 commonly used words—everything from “unemployment” to “marriage” to “car” to “water”—and simulated investing strategies based on week-by-week changes in the frequencies of each of these words as search terms by American internet users.

A listing of the 98 words used in the study, from most effective at predicting market declines (debt) to least effective (ring). Image via Scientific Reports/Preis et. al.

The changes in the frequency of some of these words, it turns out, are very useful predictors of whether the market as a whole—in this case, the Dow Jones Industrial Average—will go down or up (the Dow is a broad index commonly considered a benchmark of the overall performance of the U.S. stock market).

The strategy was relatively straightforward: The system tracked whether a word such as “debt” increased in search frequency or decreased in search frequency from one week to the next. If the term was suddenly searched much less frequently, the investment simulation bought all the stocks of the Dow on the first Monday afterward, then sold all the stocks one week later, essentially betting that the overall market would rise in value.

If a term such as “debt” was suddenly searched much more frequently, the simulation did the opposite: It bought a “short” position in the Dow, selling all its stocks on the first Monday and then buying them all a week later. The concept of a “short” position like this might seem a bit confusing to some, but the basic thing to remember is that it’s the exact opposite of conventionally buying a stock—if you have a “short” position, you make money when the stock goes down in price, and lose money when it goes up. So for any given term, the system predicted that more frequent searches meant the market as a whole would decline, and less frequent searched meant it would rise.

During the period of time studied (2004-2011), making investment choices based on a few of these words in particular would have yielded overall profits several times higher than a conservative investment strategy of simply buying and holding the stocks of the Dow for the entire time. For example, basing a strategy solely on the search frequency of the word “debt,” which turned out to be the single most profitable term in the study, would have generated a profit of 326% over the seven years studied—compared to a profit of just 16% if you owned all the stocks of the Dow for the whole period….”

Full article

Comments »

What a sick trade in such a short period of time….

Full article

Comments »

“Activist hedge fund ValueAct Capital took a $2 billion stake in Microsoft, its CEO Jeffery Ubben announced at an investment a conference in New York, today.

He explained the investment by saying, “In three to five years, which is our time horizon, we’ll stop talking about PC cycles and instead talk about Microsoft as the largest cloud-computing company in the world.”

For his sake, let’s hope so. The PC business is imploding, so Microsoft’s traditionally lucrative Windows business is flattening, and could start shrinking soon.

Microsoft has two other businesses that are doing well — Servers and Tools and the Business Division, which is home to Office. Those businesses are strong enough to offset Windows, for now.

Microsoft’s stock has been flat for the longest time. A lot of investors have been tempted by it, believing there is value to be unlocked. So far, they’ve been wrong.

Microsoft is up 12% year to date, and rose 4% on today’s news. It closed at $30.83….”

Full article

Comments »

“Pacific Investment Management Co.’s top debt picks are utility and energy companies that will benefit as China shifts to a consumer-driven economy, while indebted companies tied to the old export-led model suffer.

“We put our highest conviction in utility and energy sectors,” Raja Mukherji, Hong Kong-based head of Asian credit research at Pimco, manager of the world’s biggest bond fund, said in an e-mail interview on April 12. A shortage of energy resources and undeveloped distribution networks for consumers “creates opportunities if we can invest in the future winners early,” he said.

Utility and energy bonds gained 0.7 percent and 0.8 percent this year through April 18, the second- and third-worst performers among 12 Chinese sectors tracked by Bank of America Corp. That compares with a 2.6 percent return for real-estate bonds and an average of 2 percent for all dollar-denominated Chinese debt. Energy bonds handed investors a 37.4 percent return, topping an index average of 24 percent during China’s economic slowdown from April 2010 to September 2012.

Fitch Ratings Ltd. cut China’s sovereign ranking this month and Moody’s Investors Service lowered its outlook to stable from positive, citing risks from rising debt loads and the potential impact on the economy. LDK Solar Ltd. failed to fully pay notes last week after rival solar panel producer Suntech Power Holdings Co. defaulted on $541 million of bonds on March 15.

Slowing Economy…”

Full article

Comments »

“NEW YORKActivist investor Nelson Peltz has disclosed stakes in Mondelez (MDLZ) and PepsiCo (PEP), following earlier reports that the billionaire could be pushing for a marriage between the sweet and salty snack giants.

In a statement early Friday, PepsiCo said that it has held meetings with Peltz’s Trian Fund Management in recent weeks to consider its “ideas and initiatives” for long-term growth. A spokesman for Mondelez wasn’t immediately available say whether the company has met with Trian as well.

A representative for Trian declined to comment.

Peltz’s disclosures come at a sensitive time for the two U.S. food and drink makers. Mondelez, which makes Oreo cookies and Cadbury chocolates, has stumbled in its first quarters as an independent company after splitting from Kraft Foods. But in a short statement, the company noted that it has “created significant value through our transformation.” ….”

Full article

Comments »

“Brazil’s central bank raised its benchmark rate for the first time since July 2011, as policy makers seek to slow inflation levels jeopardizing an economic recovery.

The bank’s board, led by President Alexandre Tombini, voted 6-to-2 to increase the Selic rate 25 basis points to 7.50 percent from a record low, matching the median forecast from 58 economists surveyed by Bloomberg.

Policy makers said that “the high level of inflation” and “resilience of inflation” required a response, which was tempered by the central bank’s recognition that “external uncertainties” also required “that monetary policy be managed with caution,” according to the board’s statement posted on Banco Central do Brasil’s website.

President Dilma Rousseff’s government is facing renewed pressure to contain consumer prices after annual inflation in March breached the central bank’s target range for the first time since November 2011. Rising prices are sapping purchasing power and eroding demand even after officials cut taxes on consumer goods and lowered the Selic to 7.25 percent in October. Retail sales in February fell for the second time in three months.

“Inflation has clearly become detrimental to growth,” Gustavo Rangel, chief Latin America economist at ING Bank NV in London, said in a telephone interview before today’s decision. “Both the retail figures and investors’ confidence levels are signaling that inflation is a big concern.”…”

Full article

Comments »

“Russian President Vladimir Putin urged the government to come up with a plan to revive the flagging economy after a minister warned that a recession is possible as companies cut investment and export demand wanes.

Putin told Prime Minister Dmitry Medvedev, who will address lawmakers tomorrow, to devise steps to aid “shoots” of growth, according to televised remarks. While not the main scenario,Russia risks sliding into a recession without stimulus, Economy Minister Andrei Belousov said last week after cutting this year’s growth forecast….”

Full article

Comments »

“South Korea unveiled a 17.3 trillion won ($15.4 billion) supplementary budget to support exporters pressured by a weaker Japanese currency and revive an economy that grew last year at the slowest pace since 2009.

The package will boost growth by 0.3 percentage points and create 40,000 jobs, the Finance Ministry said in a statement in Sejong. The net increase is 5.3 trillion won after covering expected revenue shortfalls, the government said. Another 2 trillion won will be available for support measures from outside the budget, it said.

The government plan may boost consumption and confidence as China’s economy shows signs of weakness and NorthKorea’s Kim Jong Un ratchets up threats against the U.S. and the South. A stronger won, which has risen more than 21 percent against the yen in the past six months, has hindered export-reliant companies such as Hyundai Motor Co. (005380)and Samsung Electronics Co. (005930) by making their products more expensive overseas.

“The extra budget will lift up the recovery in the second half of this year, which is needed as sentiment has been weak,” said Jun Min Kyoo, a Seoul-based economist at Korea Investment & Securities Co. “The focus on job growth and exporters will boost private consumption.”

President Park Geun Hye’s government announced plans for a stimulus package on the same day last month it lowered its 2013 growth forecast to 2.3 percent from 3 percent. The government moved today after the Bank of Korea last week resisted pressure to cut the benchmark interest rate.

Create Jobs….”

Full article

Comments »

“Creditors to Lehman Brothers International Europe may be repaid in full after administrators settled disputes with some of the failed investment bank’s affiliates, increasing the size of expected future recoveries.

A recent agreement with a Lehman affiliate has freed up an additional $9.1 billion of assets, which will be distributed later this year, according to an e-mailed statement from PriceWaterhouseCoopers LLP. LBIE is planning a second dividend to unsecured creditors, as well as a first distribution to client money claimants this month.

“To be able to advise ordinary unsecured creditors that we now have a reasonable chance of eventually repaying their claims in full, marks a significant milestone,” Tony Lomas, lead administrator at PwC, said in the statement. “We do expect to pay a second, significant dividend to creditors in the near future, taking us another step towards this new target.”

The administrators have already returned 13.6 billion pounds ($20.9 billion) in cash and securities to clients with funds deposited at the defunct brokerage, PwC said in the statement. Lehman International made its first interim distribution to unsecured creditors in November, paying 25.2 pence on the pound, or about 7 billion pounds, for 1,582 claims, PwC said at the time.

Lehman failed in September 2008, filing the biggest bankruptcy in U.S. history, because of too much debt and risky real estate investments, according to an examiner’s report. The former bank is still liquidating and trying to cut claims more than four years after its collapse.

Claims on Affiliates….”

Full article

Comments »

“The U.S. Treasury Department said it will press Japan to refrain from competitive devaluation while stopping short of accusing it of manipulating the yen in a report on exchange rates.

The Treasury will pressure Japan to adhere to international commitments “to remain oriented towards meeting respective domestic objectives using domestic instruments and to refrain from competitive devaluation and targeting its exchange rate for competitive purposes,” the department said in its semi-annual currency report to Congress released in Washingtonyesterday. The report also declined to name China a currency manipulator.

“This is a shot across the BOJ’s bow,” Kit Juckes, a global strategist at Societe Generale SA inLondon, said in an e-mail. “Everyone still supports Japan’s fight against deflation, but the U.S. would much rather the yen did not weaken significantly further.”

The Bank of Japan (8301) surprised markets on April 4 by doubling monthly bond purchases to almost match the Federal Reserve’s monetary easing, and by setting a two-year horizon for achieving its goal of 2 percent inflation. BOJ Governor Haruhiko Kuroda said yesterday there’s no time limit to the stimulus.

The Bank of Japan and Japanese Finance Ministry didn’t answer phone calls today byBloomberg News.

The yen has depreciated against all 16 of its most-traded peers since April 4, declining 2.2 percent to the U.S. dollar, 3.5 percent to Europe’s 17-nation common currency and 2.8 percent to Australia’s dollar.

‘Too Rapid’…”

Full article

[youtube://http://www.youtube.com/watch?v=6ihPOTDxMfE 450 300]

Comments »

“Private company M&A and venture capital database CB Insights has issued its Q1 2013 report on venture capital and deals. According to the report, VCs invested $6.9 billion across 841 deals (eclipsing a Q3 2012 high), which is the highest level since dot-com days, says CB Insight. You can find a full copy of the report here.

One of the most interesting data points noted by CB Insights was that Series C, D and E all saw an increase in shares of funding dollars while Series A and B both saw declines. Consistent with the reports we’ve seen over the past few months, seed funding continued relatively the same despite concerns about a Series A crunch.

Deal volume was up 7 percent from last year, and funding, relative to Q1 2012, was up 17 percent. Seed VC activity was fairly flat on a sequential basis (194 seed VC deals in Q1 2013 vs. 190 in Q4 2012) but year-over-year VC seed deals are up 31 percent (148 in Q1 2012). Internet deal activity climbed to multi-year highs hitting 379 deals (best since Q1 200), but social as a category made up only 4 percent of deals. CB Insights attributes this jump to the boom in enterprise deals. Clean-tech deals and dollars also hit multi-year lows.

Investment dollars within mobile hit $718 million in Q1, a high beat only by Q3 2012, which saw $968 million in investment. The actual amount of deals dipped to 106 from 122. As a sub-industry in mobile, security is seeing a boom, with over 30 percent of funding dollars for the quarter.

Specifically for Internet companies, deal activity and funding to Internet companies increased 10 percent and 12 percent from Q4 2012, respectively, and climbed 16 percent and 35 percent on a year-over-year basis.

In terms of states for the second time in the last two years….”

Full article

Comments »

“China’s new yuan loans and money supply exceeded analyst estimates last month, aiding the nation’s recovery from the slowest growth in 13 years while adding to financial risks that may presage tighter credit.

New local-currency lending in March was 1.06 trillion yuan ($171 billion), the People’s Bank of China said today in Beijing. That compares with the 900 billion yuan median estimate in a Bloomberg News survey of 34 economists and 620 billion yuan in February. M2, China’s broadest measure of money supply, rose 15.7 percent, compared with the median forecast for 14.6 percent.

New Premier Li Keqiang is trying to keep credit flowing to sustain an economic rebound without creating asset bubbles or excessive risks in the banking system. While inflation eased more than forecast last month, Fitch Ratings Ltd. cut the nation’s long-term local-currency debt rating this week, citing dangers to financial stability.

“China’s monetary policy makers are in a tough position to balance short-term growth stability, market worries and long- term economic health,” said Lu Ting, Hong Kong-based chief economist for Greater China at Bank of America Corp.

While growth momentum is “not strong” and “external conditions are still volatile,” the data “could once again trigger fears on CPI inflation, property bubbles, government debt, shadow banking and then monetary tightening,” Lu said in a note today, referring to the consumer price index. (SHCOMP)

Financial Stocks…”

Full article

Comments »

Give us your gold at a low bid please…

Full article

Comments »

“Recent leaks of secret banking information have helped authorities around the world crack down on tax cheats who go offshore, resulting in billions of dollars recovered for the public purse. Now, in one of the biggest ever leaks of financial data, the International Consortium of Investigative Journalists has released data on a whopping 120,000 secret offshore entities in 10 different jurisdictions.

Read more about how unscrupulous investors hire high-priced lawyers and financial advisers to move money offshore in the interactive below. Select the blue button to make choices and move through each step. Read more of CBC’s coverage of the massive leak of offshore data and how tax havens sell secrecy in our special series…..”

Full interactive article

Comments »

“The European Financial Stability Facility issued 8 billion euros ($10.5 billion) of bonds amid strong investor demand in Asia, helping boost the euro to its highest levels in more than three weeks.

The European rescue fund sold 0.875 percent, five-year securities yesterday, according to data compiled by Bloomberg. Investors in Asia made up 29 percent of the buyer base, up from 5 percent on EFSF’s 4 billion euros of March 2016 bonds issued in February, according to a person familiar with the transaction, who asked not to be identified citing lack of authorization to speak publicly….”

Full article

Comments »

“The European Commission warned of “excessive” risks to the economic health of Slovenia and Spain, calling on both governments to take urgent action to stem the spread of the euro crisis.

Slovenian banks are likely to need fresh capital injections as over-indebted corporate borrowers struggle to pay back loans amid a double-dip recession, the Brussels-based commission said. It said Spain is encumbered by public and private debt….”

Full article

Comments »