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Negative Rates Point to Desperation, Says Gary Shilling

Stocks fall, Standard Chartered plunges and Valeant to restate earnings. Here are some of the things people in markets are talking about this morning.

Standard Chartered surprise loss

Shares in Standard Chartered Plc plunged as much as 12 percent after the London-based bank reported a surprise full-year loss for 2015 of $1.5 billion, far below average analyst expectations for a profit of $1.37 billion in a Bloomberg survey. The bank cut the aggregate bonus pool by 22 percent to $855 million and didn't pay executives any bonuses. Shares had recovered to trade down 5.2 percent at 11:00 a.m. London time.

Stocks fall

The recent rally in global stocks has hit a bump with shares in Asia falling overnight. The MSCI Asia Pacific Index slipped 0.1 percent, with Japan's Topix index closing 0.7 lower and China's Shanghai Composite Index down 0.8 percent. In Europe, the Stoxx 600 was 0.3 percent lower at 11:10 a.m. in London, with Standard Chartered and BHP Billiton Ltd. leading the falls after the miner cut its dividend. S&P 500 futures were 0.2 percent lower.

Valeant to restate earnings

Yesterday was something of a nightmare for shareholders of Valeant Pharmaceuticals International Inc. In a report on the company, a Wells Fargo & Co. analyst wrote that the company's shares "currently carry too much risk." CVS Health Corp. also announced that it plans to restrict the use of Valeant's toenail fungus drug - priced at $1,000 for an 8-milliliter bottle. Shares in Valeant had lost nearly 20 percent in the previous three sessions to yesterday's close. Then after the bell came the news that the company will restate some of its 2014 and 2015 earnings following a board committee review, which is expected to reduce earnings-per-share for 2014 and increase them for 2015.

'Brexit' positions taken

Following yesterday's slump in sterling after London Mayor Boris Johnson announced he would be campaigning for the U.K. to leave the European Union, the pound is again falling today, down 0.4 percent against the dollar at 11:35 a.m. in London. Ministers in the U.K. government have been taking their positions on the debate after Prime Minister David Cameron allowed them to make their own minds up on which side to back. The pound is not the only currency suffering from uncertainty as the euro is also falling

Do bond traders have the Fed wrong?

Blackrock Inc. is warning bond investors that they may be unprepared for the Federal Reserve's determination to raise rates this year. Russ Koesterich, the global chief investment strategist for New York-based BlackRock said in a report published yesterday that "inflation has strengthened, suggesting that the central bank may not be quite as dovish as the market expects." Market futures imply that traders see a less than 50/50 chance the Fed will raise rates this year. U.S. Treasuries are broadly unchanged this morning as concerns over global growth prospects continue to trump worries about a hawkish Fed.

What we've been reading 

This is what's caught our eye over the last 24 hours.

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