Good morning New York,
FT ALPHAVILLE
Is Abe's fourth arrow economic hari-kiri? - Our guest writer Philip Pilkington says consumer spending is the lifeblood of any advanced economy and argues that any program geared toward economic recovery in Japan that incorporates measures that will dampen consumer spending is likely to fail.
NEWS
Samsung earnings disappoint despite strong smartphone sales: Results from the company undershot analysts' forecasts despite estimating record earnings for the second quarter, lending weight to fears that the world's biggest electronics company by sales could struggle to meet bullish market expectations. (Financial Times)
Central banks send clear signal on interest rates: The European Central Bank and the Bank of England both took the unorthodox step of offering explicit guidance on low future interest rates on Thursday, in what amounted to a transatlantic rejoinder to hints of tightening by the US Federal Reserve. Dropping a longstanding policy of never "pre-committing" to future interest rate decisions, Mario Draghi, ECB president, ruled out any rate increase for an extended period, reflecting nervousness about the economic outlook for the bloc. (Financial Times)
Morsi loyalists set to protest in Egypt: Supporters of Egypt's ousted president Mohamed Morsi were on Friday preparing to demonstrate against his removal and the crackdown against the Muslim Brotherhood. Morsi loyalists have branded their protests against the toppling of Egypt's first democratically elected president a "Friday of Rejection". (Financial Times)
Japan banks step up interbank lending controls: The Japanese Bankers' Association is to step up its supervision of the country's interbank lending market, in the wake of a global scandal over the attempted manipulation of key rates underpinning hundreds of trillions of dollars of loans and financial products. The country's biggest banking trade group said it would revise rules for the Tokyo interbank offered rate, or Tibor, while drawing up a new code of conduct which banks must observe when they make submissions. (Financial Times).
China's Rongsheng warns on profits: One of China's biggest shipbuilders issued a profit warning on Friday and said it was "actively seeking financial support from the government" to avoid running out of cash in a stark illustration of how China's credit crunch has raised pressure on the already troubled shipbuilding industry. The troubles at Rongsheng highlight how the slowdown in the Chinese economy is having an outsized impact on such sectors as shipbuilding, which is laden with overcapacity and high debt levels. (Financial Times)
SAC Capital's Steven Cohen expected to avoid criminal charges: US prosecutors have concluded that they don't have enough evidence against the hedge-fund billionaire to file criminal insider-trading charges against him before a July deadline, the Wall Street Journal reports.
Rupert Murdoch remarks secretly recorded: TheNews Corp Executive Chairman was secretly recorded playing down the significance of wrongdoing at his UK newspapers and criticizing a police investigation as "totally incompetent". (Wall Street Journal)
Markets: Stocks were ending the week in good heart, buoyed by a burst of central bank dovishness ahead of crucial US jobs data. But some industrial commodities were struggling, with copper down 2 per cent to $3.12 a pound, pressured by::a stronger dollar, lingering concerns about the pace of global demand and the possible impact of supply-side changes. Gold was down $12 to $1,237 an ounce. The FTSE All-World equity index was up 0.2 per cent after the Asia-Pacific region rallied 1.1 per cent and as the FTSE Eurofirst 300 advanced 0.1 per cent, adding to its 2.4 per cent surge on Thursday. US index futures suggested the S&P 500 would return from its Independence Day break and bounce 14 points to 1,630. Markets have been volatile for the past several weeks on worries about a credit crunch in China and, more long term, fretting about how assets will perform should the US Federal Reserve begin to taper its $85bn-a-month bond purchases. (Financial Times)
