Updated throughout the day
December 28, 2015
So much for the Santa Claus rally. Crude oil tumbled 3.75% to $36.67 on supply glut fears and took the rest of the markets with it: The Dow Jones Industrials dipped 0.14% to 17,528.27; the S&P 500 trimmed 0.22% to 2,056.60, and the Nasdaq lost 0.15% to 5,040.99. Trading is light this short holiday week.
Here’s what else you need to know:
No indictment for Cleveland police in killing of 12-year-old. The officers were cleared in the killing of Tamir Rice after weeks of testimony before a grand jury. Rice had been playing with a toy gun which the officers said they had mistaken for a real one. Business Insider
JPMorgan to raise rates on deposits. The banking behemoth is the first to make the move after the Federal Reserve raised the federal funds rate 25 basis points before the Christmas holidays. After the announcement, the large banks raised their prime lending rate, which is used to price credit card and other consumer debt. The rate raise is for institutional clients and will vary. Wall Street Journal (paywall)
ISIS forces ousted from Ramadi. To celebrate, Iraqi soldiers fired their guns in the air and slaughtered a sheep. But some say there are still pockets of resistance. BBC
Stocks are lower everywhere as oil tumbles more than 3%, pushing the price below $37. The Dow Jones Industrials slid 0.54% to 17,458, and the S&P 500 shed 0.63% to 2,048. Seems like only yesterday that we had broached 2,100. Overnight, the Shanghai Composite tanked 2.59% and the Hang Seng lost 0.99%. The Nikkei 225 managed to climb 0.56% on hopes for more stimulus. European shares were mostly lower, with the Stoxx Europe 600 losing 0.49% MarketWatch
The Dallas Fed reports that manufacturers are feeling glum about prospects. The general business activity outlook plunging to -20.1 this month. Calculated Risk notes this is the last of the regional Fed surveys and that four out of the last five have pointed to shrinking activity. The decline in oil prices is certainly a factor.
Japan agrees on reparations for South Korean “comfort women” and apologizes publicly. The pact, announced Monday, would provide “support services” with $8.3 million in funds from the Japanese government. Comfort women were sexual slaves to Japanese slaves during World War II. In the past, private donors have arranged support, but Seoul wanted the Japanese government to both acknowledge and provide funds. Wall Street Journal (paywall)
At least 43 die in severe weather events. Over the weekend, 11 people were killed in the Dallas area by tornadoes. Over the last week, unusual weather patterns — rain, high winds, snow, ice — have resulted in nearly 900 flight cancellations and another 500 delays. New York Times (paywall)
Italian cities ban cars. Milan and Rome are severely restricting the use of cars, citing dangerous smog levels. Italy has the most pollution related deaths in Europe. BBC
Russian economy contracts 4%. Russia’s GDP shrank 4% year-on-year in November, worse than October’s 3.7% decline and in contrast to Putin’s assessment that the region’s downturn has bottomed out. Russia’s central bank recently said that its economy will likely contract further in 2016. MarketWatch
Regulators are keeping an eye on the China Vanke takeover. In another twist in this drama, the China Securities Regulatory Commission has become “highly concerned” whether the participants have properly “fulfilled their disclosure duties.” The Shenzhen Stock Exchange has already sent a letter to China Vanke regarding differences between its Hong Kong and Shenzhen disclosures. SCMP (paywall)
Japanese banks take cross-border lending crown. Cross-border investments and loans outstanding as of the first half of 2015 totaled $3.5 trillion at Japanese banks, exceeding the $3.4 trillion made by its U.K. counterparts as well as the $3.2 trillion banked by its U.S. peers. Foreign loans at MUFG alone surged to 60% over the past years. Nikkei Asian Review
Ferrari recalls 185 California Ts. The venerated automaker reportedly recalled 185 of its California T models due to a fuel leak risk and has issued a stop sale notice to dealers for the 2016 model. The leak came from a manufacturing defect made by one of Ferrari’s part suppliers. Reuters
You won’t believe this:
How desparate are New Yorkers for snow? After an unseasonably balmy Christmas, the Sanitation Department issues a snow alert on Monday — even though the weather is well above freezing. A spokesman explained: “We’re anticipating some slush in the morning.” New York Post
British man buys girlfriend goalie gloves because she’s a “keeper.” Good job there man. Mirror
Photo: faungg's photos