Frances is away for a few days so The Marty Cej Show featuring Marty Cej is back! Brace yourselves for more sports! More BBQ! More bacon!
Bob Diamond resigned as CEO of Barclays Plc early this morning, bowing to political pressure and perhaps setting a template for other bank CEOs who are
likely to get caught up in the widening investigation into the attempted manipulation of global interest rates. Barclays was slapped with nearly half a
billion dollars in penalties last week as it settled with U.S. and U.K. regulators over the rigging of the London Interbank Offered Rate, which is used as
a benchmark for everything from car loans to residential mortgages to derivatives contracts. When BNN spoke to CFTC commissioner Bart Chilton last week in
the wake of the penalties, he was clear that Barclays was settling claims for “attempted manipulation” rather than outright manipulation, and while the
investigation continued, he would not comment on where regulators’ attention was now focused. Among the many questions we need answered now is which banks
will settle next and will more CEOs step down. With Barclays in particular, we need to ask who might lead the bank next and whether it will be split in
two. Justin Urquhart Stewart of Seven Investment Management told BNN a few minutes ago that a city needs two things if it hopes to be a banking hub:
credibility and integrity. Right now, he said, London has neither.
In the meantime, Canadian stocks look poised to rise as commodity prices continue to build on Friday’s gains after a pause Monday. Oil rallied more than
9 percent Friday and gold 3.5 percent after European leaders agreed to relax some conditions on bailout funds for Spanish banks and possible financial
support for Italy. With economists expecting the European Central Bank to cut rates this week and a Chinese state-owned newspaper suggesting the time is
right for a reduction in bank’s reserve-requirement ratios, the S&P GSCI Spot Index, a broad measure of commodity prices, has climbed this morning to
its highest level since May 31.
Playing into expectations that monetary stimulus is increasingly likely, a report yesterday showing a contraction in the U.S. manufacturing economy in
June moved the Fed “two steps closer to QE,” according to TD Securities. U.S. stocks were mixed Monday with the Dow industrials showing a modest decline
and the S&P 500 and Nasdaq ending the session with gains of 0.25 percent and 0.55 percent respectively. U.S. stock markets will close at 1:00 p.m.
Eastern today and will be closed for the July 4th holiday tomorrow.
As Americans prepare to fire up the grill and raise a can of union-made beer to their nation’s birthday, individual investor sentiment towards stocks has
been mired in bear territory for eight straight weeks. A poll by the American Association of Individual Investors showed 44.4 percent of respondents expect
stocks to fall over the next six months. The historical average for investor pessimism is 30 percent. But we should point out that the last time U.S.
investors were this glum for this long was a 14-week stretch through Oct. 20, 2011. The S&P 500 then went on to rally almost 30 percent to a four-year
high of 1,419.04 on April 2. We’ll dig into investor sentiment, the quarter that was and the half –year ahead with Howard Silverblatt, senior index analyst
at S&P, at 11:00 am.
Among the stocks we’re watching today is Microsoft after the company said it is taking a $6.2 billion writedown for almost the entire amount it paid for
AQuantive, an online advertising company, back in 2007. Thanks to the non-cash charge, Microsoft is likely to report a loss for the quarter rather than the
$5.3 billion profit expected by analysts.
Enbridge is also likely to be on the move after the U.S. government proposed a $3.7 million civil penalty against the pipeline company for the 2010 oil
spill in Michigan. Enbridge committed “multiple violations” of safety regulations for maintenance, operation and management.
Every morning Managing Editor Marty Cej writes a "chase note" to BNN's
editorial staff listing the stories and events that will be in the spotlight
that day. Click here to have it delivered to
your inbox before the trading day begins.