Here is what you need to know.
Short selling is back in China. Reuters reports, 35 brokerage firms in China were cleared to allow short selling, or as BI Australia’s David Scutt explains, “the sale of a security not owned by an investor, done in the belief that the price will fall enabling the short seller to buy the stock back at a lower level for profit.” The ban on the practice was put in place in August in an effort to stop the 27% plunge in Chinese stocks during the month. With short selling back, the Shanghai Composite fell 1.6%.
Taiwan cut rates. Taiwan’s central bank lowered its key rate 12.5 basis points to 1.50%. This was the third straight quarterly rate cut, and was expected by 25 of 26 economists surveyed by Bloomberg. Thursday’s decision was made in an effort to try and jump start a slowing export sector, which is starting to weigh on the labour market. The New Taiwan dollar ended weaker by 0.2% at 32.609 per dollar ahead of the announcement.
Two of Italy’s biggest banks are merging. According to the Financial Times, Banca Popolare di Milano and Banco Popolare have agreed to merge, creating the country’s third largest bank. The merger comes following recent comments from Italian Prime Minister Matteo Renzi, which called for the country’s banks to merge in order to boost profits and lending. Italy’s banking system is saddle with non performing loans worth about €300 billion, 17.3% of outstanding loans.
Yahoo’s entire board might be out. Activist investor Starboard Value is plotting the unprecedented move of dumping Yahoo’s entire board. According to a letter cited by the Wall Street Journal, the fund will soon announce its intention to “nominate nine directors to Yahoo’s board.” Starboard believes the board has “continually failed to live up to their own promises” and “shouldn’t be trusted,” the letter reportedly says.
Wall Street deal makers are having their worst quarter since the financial crisis. Investment banks have raked in $12.8 billion in equity, debt, loan, and advisory fees so far this year. This marks a 36% decline compared to last year, and is the lowest since Q1 2009, according to Dealogic. Equity-capital markets revenue is down 55% year-over-year while high yield bond revenue is off 70% YoY.
Credit Suisse’s CEO took a huge pay cut to work at the bank. Tidjane Thiam took a 70% pay cut by deciding to leave Prudential for Credit Suisse. Thiam was paid a full year salary of 1.71 million Swiss francs ($1.75 million) during his first six months at the bank, and a bonus of 2.86 million francs ($2.93 million). His $4.68 million payout is well below the 16.5 million francs ($16.7 million) he received during his final year at Prudential. Shares of Credit Suisse are down 40% since Thiam’s arrival.
Markets around the world are closed on Friday. Stock markets around the world are closed in observance of Good Friday. Here in the US, the bond market will get an early start to the weekend, closing at 2 p.m. ET on Thursday.
Stock markets around the globe are lower. Aside from the weakness in China, Hong Kong’s Hang Seng (-1.3%) lagged overnight. In Europe, France’s CAC (-1.9%) is the worst performer. S&P 500 futures are down 9.75 points at 2019.00.
Earnings reports continue to trickle out. Accenture and Finish Line are among the names reporting ahead of the opening bell. GameStop is the notable releasing its quarterly results after markets close.
US economic data remains light. Initial and continuing claims and durable orders will be released at 8:30 a.m. ET. Then, at 10:30 a.m. ET, natural gas inventories are reported. The US 10-year yield is lower by 1 basis point at 1.87%.
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