Wall Street is once again making its way to lifetime highs, with investors betting that the next leader of the Federal Reserve will be slow to unwind the central bank’s stimulatory policies. With a rise to 15494.78 blue chips are now only 1% below their old record and the S&P 500 is even closer to its own. The NASDAQ closed lower.
Why the Fed optimism? The sun has set on former treasury secretary Larry Summers’ bid to become the next chairman of the federal reserve, Summers withdrew his name over the weekend causing a price action gap on USD currency pairs as the markets opened on Monday. Summers was largely seen as someone who would likely quickly unwind the policies used by the Fed to boost the economy after the financial crisis. The market now thinks vice chairman Janet Yellen is more likely to get the job and keep a steady hand. By the way the Fed is expected to trip its 85 billion dollar bond buying program this week.
JP Morgan Chase is close to a 700 million dollar settlement for the London Whale Trading scandal. The trading scandal resulted in more than 6 billion dollars in losses and spoiled the reputation of the bank.
There are renewed worries about potential Apple sales in China. China Telecom has been making customers pay more of the bill for the iPhone 5s than it did for the iPhone 5 according to the Wall Street journal, this is of particular concern to given apples lost market share to cheaper Android powered smartphones. At the same time the so-called lower cost iPhone 5c is being criticised for high prices. Shares of Apple have fallen by more than 3%, dragging the Nasdaq down as well.
Google is buying sharing app Bump for an undisclosed price. The app allows users to share photos, videos and other kinds of data, with the simple bump of two web-enabled devices via servers in the cloud.
Chrysler is close to filing for an initial public offering this week according to a report in the Financial Times, but the two main stake-holders, Italy’s Fiat and an affiliate of the United Autoworkers are still arguing about how much Chrysler is truly valued at. Fiat wants to buy Chrysler out before an IPO.
To close equities trading in Europe hit a five year high as investor appetite for risk warms up, as tensions with Syria cool down.