No more US money to rescue banks unless the plan guarantees tougher oversights

1. US Market Recap

 

• US markets closed mixed on Friday after a week of decline on concerns of further economic contraction:
• DOW up 32.5 points (+0.5%) to 6,627 (-6.1% WTD; -24.5% YTD)
• S&P 500 up 0.8 point (+0.1%) to 683 (-7.0% WTD; -24.3% YTD)
• NASDAQ down 5.7 points (-0.4%)  to 1,294 (-6.1% WTD; -18.0% YTD)
  
  
• The S&P 500 index were evenly split between outperforming and lagging sectors:
• Out-performers:
• Energy (+1.5%): Exxon Mobil (+2.9%), Chevron (+3.2%), Schlumberger (+1.6%)
• Health Care (+1.1%): Schering-Plough (+8.0%), United Healthcare (+9.5), Abbot-Labs (+1.9%)
• Materials (+1.0%): Rohm & Hass (+18.1%), Freeport-McMoRan (+7.1%), Dow Chemical (+9.9%)
• Laggards:
• Financials (-1.4%): Goldman Sachs (-7.4%), JPMorgan Chase (-4.0%), Bank NY Mellon (-7.1%)
• Info. Technology (-0.9%): Apple (-4.0%), IBM (-1.9%), Cisco Systems (-2.5%)
• Telecom Services (-0.8%): Verizon (-2.3%)
  
  
• Policies:
• US Senator Charles Schumer (D-NY) said on NBC’s “Meet the Press” that Congress would not agree to spend more money rescuing banks unless the plan guarantees tougher oversights such as:
• Lending to consumers;
• New limits on executive compensation, including “claw-backs” that would allow the government to recover unearned bonuses.
• The top ranking Republican on the Senate Banking Committee, Richard Shelby, said he would oppose another bank rescue.
• Senator John McCain said Congress should stop giving aid to GM, instead allowing it to go bankrupt so that the carmaker can reorganize and renegotiate its labor contracts today.
  
  
• Economic data – light week:
• Feb non-farm payroll of 651K, vs. est. of 650K.
• Feb unemployment rate of 8.1%, vs. est. of 7.9%.
• Feb ICSC Chain Store Sales (YOY) decline of -0.1%, vs. est. of -1.4%.
• 10 Mar (Tue): Jan wholesale inventory
• 11 Mar (Wed): MBA weekly (Mar 7) mortgage application
• 12 Mar (Thu): Feb advance retail sales, weekly initial/continuing claims
• 13 Mar (Fri): Mar U. of Michigan Confidence

 

2) European Update

• Daimler and BMW are planning joint purchases of parts and materials to initially save several hundred millions of euros.
• EADS sales rose 11% to about EUR 43bn and CEO Gallois may be replaced.
• BNP said new Fortis deal arrangement completed. BNP will buy Fortis bank for EUR 8.3bn in shares and 25% of Fortis Assurances for EUR 1.375bn in cash.
• Credit Suisse says Hans Ulrich Doering will be the new chairman.
• SAP may extend its zero-financing offer to clients through June to encourage software investment.
• Lloyds have announced details of their asset protection plan. It would be fully underwritten by HM Treasury.
• Roche raised offer for Genentech to USD 93 from USD 86.5
• The financial situation at Dresdner Bank is a lot more dramatic than expected and Commerzbank will have to pump even more money into the bank.

 

 

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