Current Futures: Dow +54.00, S&P +6.50, NASDAQ +12.75
European Trade: European markets opened mixed, while U.S. futures are trading somewhat lower in the last day of the week. Asian markets also closed mixed, erasing the gains seen in the early part of the trading session.
The Japanese market closed lower, shedding the gains seen around the opening bell. The Topix index fell for the first time in the last nine days, the largest winning streak in four years. Helped by the gains seen in the major indexes, the MSCI World Index rose 12% in March, the most since 1975. The equity rally was fueled by the banking sector, which reported earnings for the first part of the year, and by central banks that pledged to intervene in the currency market.
Barclays, one of the few U.K. banks that still is resisting any government intervention, will have to make a major decision in the coming week, whether or not to join the toxic asset insurance scheme set by the U.K. Treasury. In order to join the program, Barclays is undergoing a stress-test program, run by the Financial Services Authority (FSA). According to sources cited by Financial Times, Barclays does not need any further capital injections.
Unlike the other major U.K. banks, Barclays has refused, until now, any help from the government, which in the last period nationalized a major part of the U.K. financial system. The other two banks that joined the toxic asset insurance scheme, Lloyds and RBS, are now state-controlled and the shareholders are practically wiped-out.
Both the FSA and the government decided to stress test Barclay’s balance sheets, so it could avoid a situation in which the bank would refuse the insurance scheme, but would ask for help at a later date. Currently, the bank hopes to raise cash by selling its iShare business, which could bring the bank around $6 billion. Barclays’ shares rose 9% tonight, the second best gainer in the U.K. Ftse
Switzerland, the country known for its neutrality and its banking secrecy, may be forced to give up one of the two. Following increasing calls from the world’s political leaders to tackle tax evasion and banking secrecy, Swiss banks see their business model under threat.
Consequently, some Swiss banks have imposed travel bans for their top executives. The decision was made after some senior UBS employees had been detained by U.S. customs as part of a federal tax investigation. Eventually, the trial ended by UBS having to pay $780 million in fines. It appears that the Swiss financial system may have to undergo some major changes in the coming years.
Tonight, the Nikkei fell 9.36 points (0.10%) to 8,636.97. The Australian S&P/Asx added 25.70 points (0.70%) to 3,672.30. The U.K. Ftse rose 15.71 points (0.40%) to 3,940.91, while the German Dax gained 9.76 points (0.23%) to 4,269.13
Crude oil moved very little since the new day of trading. Crude oil for April delivery declined $0.20 to $54.05
Gold continues to decline during the overnight session, but on a light volume. Bullion for immediate delivery fell $4.40 to $937.80.