Good Speech — But Does It Matter to the Markets? (Reuters)
President Obama regained his speaking cadence last night and looked every bit the statesman/politician that he can be. He is a good orator but will anything he said make a positive difference in the markets? Not really, according to a Reuters article this morning. What will make a difference, though, is whether Obama and Republicans can play nice again before the March sequestration when $1.2 billion spending in cuts are enforced. Most are betting they will deliver an 11th hour deal, just as they did for the original “fiscal cliff.” Then we’ll see how the markets react.
Slash-ING Costs (CNBC)
Patrick Flynn, chief financial officer of Dutch financial goliath ING, announced this morning that the company missed earnings estimates for Q4 2012. As a result, the company would be embarking on an aggressive 1 billion euro ($1.34 billion) cost-cutting campaign. Investors should note that by “aggressive” he meant today — as ING disclosed plans to cut 2,400 jobs, at the same time it announced earnings. A further reduction of 5,100 jobs is expected across the company’s banking and insurance divisions. Shares were down slightly today on the news.
Big Boys Bailing on Long Bonds (Bloomberg)
BlackRock, Inc., the world’s largest money manager, is getting ready to launch actively managed, exchange-traded funds ( ETFs) focused on short-term debt. And one of these funds’ goals is to repay principal within a year of opening. Loomis Sayles & Co. has also shifted away from 30-year bonds and focused more on 5- and 10-year corporates since last April. Why are these past Treasury titans going shorter? They fear — as does much of the bond market — that interest rates are bound to rise, and sooner than others think. For debt holders like you and me, these actions certainly warrant a closer look at our own bond maturities, to see if we should follow suit.