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Stocks are mixed, China cracks down on hot housing markets, and Japan mulls fiscal stimulus. Here are some of the things people in markets are talking about today.
Markets are mixed
Front-month S&P 500 futures contracts are up 0.4 percent as of 10:52 a.m. in London after a mixed overnight session in Asia. West Texas Intermediate front-month oil futures are up 0.4 to $39.62 per barrel as of 6:40 a.m. New York time, but some investors are wondering whether the massive surge off the mid-February lows was one giant short squeeze. The STOXX Europe 600 Index and the FTSE are closed Monday in observance of the long Easter weekend. The yen is the worst-performing major currency tracked by Bloomberg as of 6:40 a.m. Eastern Daylight Time, while commodity currencies, led by the Aussie dollar, are advancing, as is the British pound.
China cracks down on red-hot real estate
Chinese stocks slumped amid the announcement of changes that will crimp demand for homes in some of the hottest real estate markets in the country, with property developers leading the way down. Policymakers introduced measures, including higher down payments, to tame high-flying home prices in select cities in an attempt to remedy the nation's bifurcated market. Home values in major cities like Shanghai and Shenzhen have diverged markedly from those of lower-tier cities after a recent round of robust price appreciation.
Japanese stocks moved higher amid reports that Prime Minister Shinzo Abe will soon announce a front-loaded stimulus package to buoy economic activity. The island nation's economy contracted in two of the past three quarters. Economists expect that Abe will make a decision on whether or not to delay another sales tax increase shortly before Japan hosts a Group of Seven summit in May.
Loeb warns on Japanese giant's succession plan
Third Point LLC's Daniel Loeb is at it again. The billionaire activist investor wrote a letter to Seven & i Holdings Co. CEO Toshifumi Suzuki warning that management succession should be a matter of meritocracy, not nepotism. Loeb joined other investors in speculating that Suzuki's son could become next in line to lead the firm, while Ryuichi Isaka, the current president of Seven-Eleven Japan, could be demoted. Third Point's position in the Japanese grocery and retail holding company first became public in October. The stock ended the session nearly 2 percent higher.
The Federal Reserve's preferred gauge of inflation, the core PCE index, is slated to be released at 8:30 a.m. ET. Analysts anticipate that the annual rate will tick higher to 1.8 percent after January's hotter than expected reading. Fed Chair Janet Yellen suggested that some transitory factors contributed to the recent jump in core inflation. Also on deck: February's advance trade balance and pending home sales, as well as the Dallas Fed's index of manufacturing activity for March.
What we've been reading
This is what's caught our eye over the weekend.
- Leverage, liquidity, and LLCs. It's hedge funds in Treasuries.
- 2018 could prove to be a perfect regulatory storm for banks.
- China's capacity closure issues: "Resettling" laid-off steel workers has become a problem.
- It didn't take long for investors to start to sour on copper again.
- Things that go badly during daylight savings time: health, life satisfaction... and stocks.
- That time FT Alphaville's Izabella Kaminska defaulted on Bloomberg's Tracy Alloway.