Updated throughout the day
September 18
Good evening everyone. Well its seems that instead of quelling uncertainty over the global economy, the Federal Reserve decision to stand pat on interest rates was more confusing than calming. Asian stock markets went ‘huh?’ and bond markets rallied. The Shanghai and Hong Kong indices rose a modest 0.38% and 0.30%, respectively. Markets in Jakarta, Kuala Lumpur, and Tokyo were all down. This is how the major Asian markets looked at the close of play:
- Jakarta Comp: -0.32%
- KLSE Comp: -1.01%
- Nikkei 225: -1.96%
- Straits Times: +0.29%
- Seoul Comp:+0.98%
The Financial Times noted core sovereign bonds benefited from anxiety at the Fed that global economies might be struggling to grow. Industrial commodities struggled for traction. The FTSEurofirst 300 index is off 0.7%, while US index futures indicate the S&P 500 will dip when the starting bell ring in New York.
Here’s what else you need to know:
Danke, Janet. With Yellen & Co. keeping rates unched, European bond yields are starting to drop like flies. German 10-year bund yields have fallen 0.09% to 0.688%, while Portuguese and Italian 10-year bond yields slide to 2.532% and 1.793% respectively. Grazie mille, Signora Yellen! Financial Times (paywall)
1MDB “misplaces” another $1 billion. As if it wasn’t bad enough that $700 million of its cash went into the prime minister’s accounts and that $1.4 billion due to a Middle Eastern counterparty vanished into thin air, Malaysia’s state fund 1MDB is now in the hot seat after a reported $993 million payment it made to the International Petroleum Investment Co. – Abu Dhabi’s sovereign fund – somehow never reached the emirate. Wall Street Journal
Hungary begins fencing off its borders. In an effort to stem the tide of migrants, Hungary has begun erecting a fence along its border with Croatia as well as with Serbia. Prime Minister Viktor Orban called it a move that will prove “to the people, ourselves and the whole world that even as a flood [of migrants] is heading toward Europe, this tide can be curbed, channeled in an organized way, and checked for [security] risks if everyone did their job.” Wall Street Journal
China relaxes rules for trafficked kids. China has relaxed rules for the legal adoption of trafficked or abandoned Chinese children, state media reported on Friday, as the government works to combat the pervasive problem of child trafficking. Channel News Asia
Smog smothered Indonesia rejects Singapore’s help. Indonesia has again declined Singapore’s offer of help in fighting haze-causing fires, with Environment and Forestry Minister Siti Nurbaya Bakar saying Indonesia is trying to handle the situation on its own. Channel News Asia
Boko Haram displaces 1.4 million children. Fear of attacks by Boko Haram, the Islamist extremist group of northern Nigeria known for its deadly marauding and kidnappings, has uprooted a half-million children in the past five months, Unicef said in a report released Thursday. New York Times
The People’s Bank of America kept rates steady. The Federal Reserve stood pat on rates earlier this morning. Markets had been evenly divided on whether the Fed would raise rates for the first tim esince 2006. The FOMC statement had intriguing tidbits in it — such as one person on the committee actually dotted a negative Federal funds rate at the end of 2015 and 2016. The statement emphasized that the Fed would move rates once they see “further improvement” in the labor market. Which is interesting given that unadjusted jobless claims are near their lowest in decades. Yellen etal seem to believe that there’s more behind that number than meets the eye.
Carmakers redouble efforts amid China slowdown. With car sales in China set to contract for the first time in decades, carmakers are boosting their after-sales and financing efforts to squeeze a little more juice from a drying lemon. “We’re under conditions that make us sweat with urgency.” Reuters
Altice snaps up Cablevision. Altice NV, headed by its hyper-acquisitive founder Patrick Drahi, just sealed a $17.7 billion deal to buy Cablevision from the Dolan’s. Altice is set to pay $34.90 per share, a 22% bump from its previous closing price of $28.54. Reuters
U.S. watchdog cracks down on Bitcoin trading platform. The U.S. Commodity Futures Trading Commission ordered DerivaBit, a trading platform that offers Bitcoin options, to halt all operations immediately. The CFTC asserts that “Bitcoin and other virtual currencies are a commodity covered by the Commodity Exchange Act,” and the fact that these guys operated unregistered did not sit well with them. CFTC
U.S. Housing starts edge lower in August. Starts fell to 1.126 million, 3% below the July level which were revised downward along with June. Housing is recovering, but is still well below the norm.
Ron Perelman quits Carnegie Hall board. The financier announced his resignation, effective next month, following ongoing battles with Carnegie Hall leaders. Perelman says the hall lacks transparency in operations, and the process of approving third-party transactions is lacking. Wall Street Journal
FIFA exec suspended. Jerome Valcke, the second highest ranking FIFA official, is on leave while under investigation for corruption. Valcke may be tied to the black-market sale of World Cup tickets. New York Times (paywall)
You won’t believe this:
Thai cadets forced to smash iPhones. A video showing Thai navy cadets smashing their mobile phones with a brick has gone viral. It took place in a school were mobile devices are banned, but where students obey an “honour code” requiring them to destroy their phones if they break the rule. BBC
Brooklyn amour. Parisians love the Brooklyn hipster stereotype and are buying into it, literally. High-end story Le Bon Marche is selling the most hipster things possible, such as knitted beanie caps and beet flavored bagels, and the French are eating it up.Wall Street Journal
Matt Damon got booked by the PC Police. This week in irony, Matt Damon, after years of championing diversity, was slammed for dressing down “Project Greenlight” producer Effie Brown for actually trying to push diversity on the show, telling her: “When we’re talking about diversity, you do it in the casting of the film, not in the casting of the show.” Ooh. New York Post
Photo: Quinn Dombrowski