Eagle Eye Opener: Global Indexes Rise on Good News in China and Europe; UBS Fined $1 Billion in Libor Scandal; BMW Outperforms Mercedez »
Global Indexes up on China & European News (AP)
Good news from two different regions of the world buoyed the hopes for global investors. First, for the third month in a row, HSBC’s China Purchasing Manager’s Index (PMI) rose, this time to a 14-month high of 50.9. That’s the third month in a row that the PMI has been above 50, which represents manufacturing expansion. Far East markets rose slightly on that news. Elsewhere, European markets rose after the European Union reached an agreement on creating a single supervisor for its banks and finally decided to give Greece its bailout funds. Britain’s FTSE 100, Germany’s Dax and Frances CAC-40 all were up on the news.
Second Major Bank Fined in Libor Scandal (Reuters)
Swiss banking giant UBS will follow in the steps of British-bank Barclays and receive an enormous fine for its role in the Libor interest rate fixing scandal. Only UBS will be fined $1 billion, more than twice as much as Barclay’s $450 million — perhaps indicating that UBS had a much more active roll in fixing the rates. Both are accused of improperly reporting figures used to calculate the Libor figure — which is then used to calculate the interest rates for trillions of dollars of loans worldwide. Tweaking the Libor rate can result in deals benefiting the offending banks, as that rate is used in many complex bank products.
Battle Between Luxury Brands Going to BMW (Bloomberg)
Investors favor luxury car maker Bayerische Motoren Werke AG (BMW)’s brand (45 billion euros in market cap) almost twice as much as Mercedez Benz’s (about 25 billion euros in market cap), greatly damaging the attempt of the Mercedez CEO Deiter Zetsche to reclaim the position of world’s biggest luxury-car maker. BMW has supplanted Mercedez due to the former’s increased popularity among younger drivers, among other reasons. Mercedez was overtaken by BMW as the top luxury car manufacturer in 2005… a position that Zetsche vowed to reclaim by that decade’s end. His contract ends next year, with that goal still unattained.