Europe’s Morning MoneyBeat: Yellen Impresses On the Hill, Stocks Cheered


DATE: Nov. 15, 2013, 9:45 a.m.

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  1. Investors seem to have liked what they heard from Janet Yellen, the White House’s choice to succeed Ben Bernanke at the top of the Fed. She testified before the Senate Banking Committee Thursday and, while no games have been changed, stock markets seem at least to be reassured that stimulus probably won’t be cut back this year.
  2. That prospect had been a looming threat to investors’ holiday cheer, and, while a December taper obviously remains possible, Ms. Yellen’s defense of the Fed’s bond-buying program would seem to render it that much less likely.
  3. Joy at this prospect saw U.S. stocks gain, indeed the Dow and the S&P set new records. Again. Their European counterparts are tipped to follow suit. However, weak growth data out of the euro zone is casting an increasingly dark pall, as is the clear transatlantic divergence in monetary policy.
  4. Local investors will probably be left to worry about this Friday. The data there is due today is a little second tier and unlikely to provide much else to focus on. They might take early cues from the Nikkei, which has put in a strong performance, aided by a stronger dollar post Yellen. Japan’s benchmark has ended at a six-month high, topping 15,000 and returning to ‘bull market’ territory.
  5. Market Snapshot: U.S. stocks (Thursday close): DJIA up 0.4%, Nasdaq up 0.2%, S&P 500 up 0.5%. Nikkei up 2.0% (Friday’s close). Brent crude up seven cents at $108.35, Nymex up 37 cents at $94.13. Gold up $0.70 at $1,287. USD/JPY at Y100.05, above Y100.03 late Thursday in New York. EUR/USD at $1.3460, a touch above $1.3459.
  6. Watch For: EU CPI data, and after that it’s all about the U.S., with the Empire State manufacturing index and October’s industrial production figures both due.
  7. What You May Have Missed From MoneyBeat:
  8. Return To Bull Market Seen for Nikkei: Japan stocks continued their strong advance Friday, breaking through the key 15,000 mark for the first time since late May, helped by a strong dollar and renewed enthusiasm for equities based on dovish comments on U.S. monetary policy by Federal Reserve chair nominee Janet Yellen.
  9. Soros Takes a Stake in Microsoft: Soros Fund Management purchased a significant new stake in Microsoft in the quarter that ended Sept. 30, as the technology giant continues to search for a new chief executive amid a series of broad company changes.
  10. It’s ‘Mission Accomplished’ at UBS: A lot of banks have been reconsidering their strategy of late, with stricter capital requirements looming and the general appetite for risk waning. But UBS has perhaps been more vocal than most about the transformation of its risk profile, thanks to a drastic reshaping of its investment bank that’s been broadcast for about a year.
  11. Global Investment Banks Could Face $100 Billion in Civil Litigation Costs: Global investment banks could be on the hook for almost $100 billion over the next decade in civil litigation costs tied to allegations of foreign-exchange markets rigging, interest rate manipulation, and soured mortgages according to a new report.
  12. Australia’s Freelancer Soars on IPO Debut: Twitter may have soared more than 70% on its trading debut last week, but the performance of Australia’s Freelancer Ltd. makes the social messaging platform’s successful listing look pale in comparison, rallying as much as 420% on Friday.
  13. Banking on Auto Maker Consolidation in Japan: While Mitsubishi Motors Corp. openly denies any desire to merge with a bigger rival, behind the scenes, the mid-sized auto maker’s main bank and shareholder — Bank of Tokyo-Mitsubishi UFJ — has been working to push more consolidation in the industry.
  14. Berkshire Hathaway Reports New Stake in Exxon Mobil: Warren Buffett’s Berkshire Hathaway Inc. disclosed Thursday it had picked up a $3.45 billion stake in Exxon Mobil Corp., a sizable new addition to its roughly $107 billion portfolio of stocks.
  15. Regulators Looking to Tame Unruly Bitcoin World: The top banking regulator in New York is accelerating his hunt for bitcoin bad guys, announcing that he will hold hearings that could help determine whether virtual currency companies will need to apply for a special “bitlicense” to operate in the state.
  16. Here Are the Bankers Who’ll Face MPs over Royal Mail IPO: Senior bankers who will face members of the U.K. Parliament over the privatization of Royal MailRMG.LN +0.36% were named on Thursday ahead of a hearing due next week.
  17. Peltz Holds On to Mondelez Stake: Nelson Peltz’s Trian Fund Management LP in the latest quarter kept its stake unchanged in Mondelez International Inc., a company the activist investor has put some pressure on since amassing a stake earlier this year.
  18. From The Wall Street Journal:
  19. Yellen Defends Fed’s Role, Current Path: Federal Reserve Vice Chairwoman Janet Yellen signaled Thursday that no big changes would come to the central bank under her leadership if she becomes its next chief.
  20. CIA’s Financial Spying Bags Data on Americans: The Central Intelligence Agency is building a vast database of international money transfers that includes millions of Americans’ financial and personal data, officials familiar with the program say.
  21. Obama Makes Concession on Health Law: President Barack Obama, in a retreat aimed at quelling the latest protest over his health-care law, on Thursday said insurers can extend by one year those policies they had canceled for failing to meet the law’s requirements.
  22. U.N. Says Iran Has Curbed Nuclear Program: Iran has virtually frozen the expansion of its vast nuclear program since President Hasan Rouhani took office in August, the United Nations reported, potentially aiding diplomacy between Tehran and global powers that resumes next week.
  23. UBS Still in Revamp Mode: The Swiss lender has held talks, since stalled, with Japan’s Sumitomo Mitsui Banking Corp. about forming a partnership.
  24. Japan’s Hints Sink the Yen: Japan’s currency is once again tumbling and its stock market soaring as officials signaled they are prepared to fight to keep the yen weak.
  25. Price Dispute Threatens India Sugar Production: Major Indian sugar mills have refused to buy cane from farmers at state-mandated prices that they say would cause them to lose money, raising doubts about output in the world’s second-largest sugar-producing nation.
  26. Cisco Shock Spurs Debate on Industry Changes: The Silicon Valley technology bellwether on Thursday lost 11% of its market value—worth more than $14 billion—the day after Cisco missed its first-quarter sales target and projected its first revenue decline in four years in the current period.
  27. Source:

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