What's Happening in the World?

It's a light day for economic data, so let's have a look at the news to get a sense of what might be moving the markets.

 

Australia

• In the face of growing political opposition, Australian Treasurer Wayne Swan has announced that he plans to reject the bind by the Singabpore Exchange to take over the ASX Ltd.  "FIRB informed SGX that I had serious concerns about the proposal and that, subject to further consideration, I intended to accept the unanimous FIRB advice that the takeover would not be in the national interest."

China

• The People's Bank of China has announced that it is raising benchmark one-year deposit rates by 25 bps to 3.25% and one-year lending rates by 25 bps to 6.31%, effective April 6.  Speculation is that Chinese inflation, which was at 4.9% in January and February, may have risen again (although actual data won't be available until April 15).

Japan

• TEPCO, the operator of the damaged Fukushima nuclear plants, says they have found water outside the reactors which is at five times the legal safe limit for radiation.  The Japanese government is also considering imposing restrictions on seafood, after finding contaminated fish in seas south of the reactors.
• Damage to the Fukushima reactors has cost TEPCO 23% of its generating capactiy, which cannot be made up by other companies.  "A legacy dating back to World War II means the two sides of Japan's main island operate different power frequencies, making their generators incompatible."

Libya

• An oil tanker has arrived at the rebel-held port of Marsa el Hariga, and is expected to load the first cargo since the uprising began.  The Equator is capable of carrying 1 million barrels of oil, or about 77% of Libya's pre-war daily export volume.

PIIGS

• Moody's has cut Portugal's sovereign debt to Baa1, leaving the nation's debt just two steps from "junk bond" territory.

Switzerland

• Transocean, the company that operated the Deepwater Horizon, has declared that, "in recognition of the Company's achievement of the objectives set at the beginning of 2010 relating to the Company's safety record," cash performance awards will be made to the Named Executive Officers.  This is composed of 25% of base salary for Mr. Newman ($275,000), 18.75% of base salary for Mr. Rosa ($93,750), 16.25% of base salary for Mr. Brown ($81,250), 18.75% of base salary for Mr. Bobillier ($81,562.50), 18.75% of base salary for Mr. Toma ($81,562.50), and 15% of base salary for Ms. Richard ($53,250).

 

United States

• The Nasdaq OMX Group is rebalancing the Nasdaq 100 index.  The rebalancing, which will be effective May 2, will reweight 82 different securities to bring them more into line with market capitalization.  Among the changes, Apple will be cut from 20.49% of the index to 12.33%, Microsoft's weighting will increase 4.9%, Oracle's weighting will rise 3.4%, and Google's weighting will rise 1.6%.  After the rebalancing, Apple will still be the largest component of the index.
• House Budget Committee Chairman Paul Ryan has proposed a budget plan that would cut government spending by a total of $5.8 billion over the next 10 years[1].  The plan is expected to dramatically change Medicare and Medicaid and put hard caps on government spending and tax cuts, and is expected to pass the House but not the Senate.
• Interior Secretary Ken Salazar has denied reports that BP is in talks with Washington to restart drilling at existing oil fields in the Gulf of Mexico.
• Elsie Eiler has been officially recognized as the sole inhabitant of the only incorporated town in the United States with a single resident.

[1]  No word on defense spending, which represents 17.94% of President Obama's proposed 2012 budget.  If you look just at items labeled "national defense".  If you include "defense-related expenditures", it goes to between 27.6% and 37.9% of the budget.