World leaders gather in Brussels for G7

Leaders of the world’s seven richest nations are meeting in Brussels on Wednesday and Thursday at the G7 summit. The meeting was supposed to be a Group of Eight meeting and was to take place in Sochi in Russia, but other leaders decided on a boycott following the Russian intervention in Ukraine. The summit is expected to cause considerable traffic disruption in the Belgian and Flemish capital.

G7 Summit Brussels, Presented by European Court Experts

G7 Summit Brussels, Presented by European Court Experts

Foreign policy, the economy, trade and energy security are all on the agenda of the summiteers that include America’s President Obama. Given Europe’s dependency on Russian gas and oil the international community’s response to Russia’s actions in Ukraine should lead to some very interesting discussions.

After the G7 in Brussels the summiteers move on to Normandy for events to mark the D-Day landings by the Allies that took place exactly seventy years ago. Here meetings are planned with President Putin of Russia.

In addition to the G7 nations, Canada, France, Germany, Italy, Japan, the UK and the US, the EU is also represented by Commission President Jose Manuel Barroso and Council President Herman Van Rompuy.

The summit starts with a dinner at which foreign policy issues including Ukraine will be discussed. Syria, Afghanistan, Mali, the Central African Republic and North Korea are also on the agenda. On Thursday the focus switches to the economy with discussions on the free trade deal between the US and the EU. International development is being discussed at the dinner on Thursday.

Buffett pressures Coke privately on compensation plan after publicly abstaining: WSJ

Investor Warren Buffett poses for a portrait during an interview after a luncheon to benefit the Glide Foundation of San Francisco in New York April 23, 2014.

Investor Warren Buffett poses for a portrait during an interview after a luncheon to benefit the Glide Foundation of San Francisco in New York April 23, 2014.

The Coca-Cola Co (KO.N) is likely to revise its controversial equity compensation plan for executives before it goes into effect in 2015, following pressure from Warren Buffett, the Wall Street Journal reported, citing people familiar with the matter.

Buffett, chairman of conglomerate Berkshire Hathaway (BRKa.N), made his reservations about the plan known privately in recent weeks to Coca-Cola’s Chief Executive Muhtar Kent in three conversations, the Journal quoted sources as saying.

As of February 24, Berkshire owned 400 million shares of the company, just over 9 percent of the shares outstanding, according to Thomson Reuters data

Buffett said last week that he thought Coca-Cola’s controversial equity compensation plan was excessive, but Berkshire Hathaway abstained in the shareholders vote.

Buffett, in an interview with CNBC, said he and partner Charlie Munger did not want to vote against the plan because he did not want to show disapproval of Coca-Cola’s management.

On Tuesday, Buffett said that he had spoken to Kent „multiple times“ and to his son Howard Buffett „very briefly“ in reference to the equity compensation plan, adding that his son served Coca-Cola shareholders and not Berkshire on the beverage maker’s board.

imageBuffett’s pressure adds to that from critics, most notably activist investor David Winters, who said the plan would dilute the holdings of current shareholders too much.

Coca-Cola had said last week that 83 percent of shareholders approved the plan. Spokesman Petro Kacur said in an emailed statement to Reuters that „no changes are being made to the plan at this time.“

The expected changes include awarding fewer options per staffer each year, so the pool of options in the new plan lasts longer, the Journal said, quoting a source.

Another choice could be a longer vesting period for options than the four years the plan calls for. A third move would involve flipping the 60-40 percent split between stock options and performance units, the Journal said.

Obama and Merkel warn Russia of economic sanctions over Ukraine

US president Barack Obama and German chancellor Angela Merkel hold a joint news conference in the Rose Garden.

US president Barack Obama and German chancellor Angela Merkel hold a joint news conference in the Rose Garden.

US and German leaders present united front in warning Putin futher sanctions inevitable unless Russia reverses course

US president Barack Obama and German chancellor Angela Merkel on Friday warned Russia that sanctions targeting whole sections of the country’s economy would be inevitable unless Moscow de-escalates the situation in Ukraine before elections later this month.

Appearing together at the White House, Obama and Merkel insisted they were united in their determination to use broad, so-called “sectoral sanctions” against Russia unless it reverses course in Ukraine by the elections on May 25.

However, in remarks likely to reassure Berlin, which is particularly dependent upon Russian gas exports, Obama played down the suggestion those sanctions would include sweeping restrictions on Russia’s sale of energy to Europe.

“Energy flows from Russia to Europe, those continued even in the midst of the cold war – at the the height of the cold war,” Obama said. „The idea that you’re going to turn off the tap to all Russian oil and natural gas exports is, I think, unrealistic.“

President Putin, Russia

President Putin, Russia

Obama said there was „a remarkable unity between the United States and the European Union“ about how to use leverage against Russian president Vladimir Putin over his continued interference in Ukraine.

European countries disagree over what form additional sanctions against Russia should take. “We have to take those [differences] into account,” Obama added. “Not every country is going to be in exactly the same place.”

However, if Russia impedes Ukraine’s forthcoming elections, Obama said, “we will not have a choice but to move forward with additional, more severe sanctions.“

Merkel also gave a strong endorsement of potential new sanctions against Russia. “In Europe, we have taken a position that should further destabilisation happen, we will move to a third stage of sanctions. I would like to underline this is not necessarily what we want, but we are ready and prepared to go such a step,” she said, according to a White House translation.

“We will see to it that elections can take place,” she added.

Angela Merkel, Germany and US President Barack Obama

Angela Merkel, Germany and US President Barack Obama

The strength of Merkel’s remarks about sectoral sanctions, while satisfying Washington, may surprise other European leaders. Senior European officials have been playing down the prospects of such broad-brush sanctions, which could also hurt Europe’s economy, suggesting they would only be used as a last resort, in the event of a full-scale military incursion by Russia across the border.

Both leaders called for the immediate release of seven hostages who were working as monitors by the Organisation for Security and Cooperation in Europe when they were captured by pro-Russian forces in eastern Ukraine.

Merkel, who has spoken directly with Putin to try to secure the release of the hostages, four of whom are German, said their release was „a very crucial step, that needs to happen first“.

The chancellor’s appearance with Obama marked her first visit to Washington since disclosures by the whistleblower Edward Snowden revealed her phone calls had been recorded by the National Security Agency.

Germany has been pressing for months for a mutual “no spy” agreement with the US, without success. Instead, Germany and the US have agreed to an ongoing “cyber dialogue” over issues relating to the balance between intelligence and privacy.

The language falls well short of what Berlin wanted, and Merkel made clear that differences remain between the the two countries on the issue.

She said that, while there was some intelligence cooperation between the countries, there are still differences over “what sort of balance to strike over the intensity of surveillance” used to combat terrorism and the consequences for privacy and individual freedom.

In Lagos, the 1% Takes Stock

A burgeoning wealthy class is settling into one of Africa’s fastest-growing cities, attracting designers, world-class architects and a growing creative community that seeks to preserve its culture through art and fashion.

Courtesy of Janice Robinson
The Land Cruisers and Range Rovers began lining up on a steamy Sunday afternoon outside Tafawa Balewa Square long before sunset. The banking tycoon Otunba Subomi Balogun was hosting his 80th birthday party and nobody wanted to be late, and there was also the matter of inching past the press of beggars living in the square’s arcade. Once through a security line, women in gold headdresses and men in white robes disembarked. Balogun lives in a mansion modeled on the White House, furnished entirely in white and gold, and the invitation had asked guests to wear his favorite colors.

imageGuests sashayed through the tent doors into a scene of surreal opulence. At the far end of the tent, engulfed by servants, courtiers, national politicians and guards with wires in their ears, the celebrant perched beside his wife on a throne covered with white faux fur, his every move broadcast on flat-screens arrayed around the tent walls. From the throne, the founder of the First City Monument Bank (F.C.M.B.) could survey his 1,000 guests, acres of floral arrangements and goldfish ponds brought in for the occasion, and the legion of waiters ferrying Taittinger and Veuve Clicquot and steaming trays of traditional Nigerian stews and rice. Bands and dancers performed in succession, a professional actress emceed and business and blood royalty mingled with state governors and the archbishop of Lagos. Massive cakes, one a replica of Balogun’s columned white house, and one designed to match his white Rolls-Royce, were stationed in front of the head table.

Governors began their speeches by acknowledging “the celebrant” and other honored guests whom they referred to as “your royal majesties.” The archbishop gave a benediction calling on God’s blessings. Another elderly gentleman, a childhood friend of Balogun, croaked out a rendition of “Happy Birthday.” In their formality and vocabulary, the speeches came from another era, Victorian perhaps. If a speaker could find a three-syllable word to replace a one-syllable word, he chose it. But nobody paid any attention at all. The younger guests were too busy networking, exchanging business cards and tapping numbers into their phones. Nigerians, I was told, often look like they are partying, but they never stop doing business.

Lakin Ogunbanwo
The Nigerian banking tycoon Otunba Subomi Balogun designed his house to resemble the White House.
The world may still associate Nigeria with the legendary Afrobeat musician Fela Kuti and online credit card scams, but the nation is now home to one of the wealthiest microcommunities in the world. These global super-elites educate their young in Swiss boarding schools and at Oxford or Princeton, pay cash for luxury homes and cars, and hold major London and New York real estate parcels in their portfolios.

As of last year, Nigeria was the 11th largest oil-producing nation in the world. Otunba Balogun and the men of his generation amassed giant fortunes because they were in the right place and knew the right people when Nigeria began nationalizing its oil in 1971. Home to great petro-fortunes, Lagos is Dallas minus the glittery malls and pedicured blondes – although the shops are starting to come in. It is a city of mind-boggling extremes. The average life expectancy in Nigeria is about 53 years, and citizens rich and poor struggle with hourly power outages and obtain their own potable water, which the poor often carry home on their heads. A small elite live in walled enclaves where palms and bougainvillea shield Porsche collections, new palaces and swimming pools. According to a recent study by New World Wealth, the number of Nigerian millionaires is expected to reach 23,000 by 2017. As in oil-rush Texas, crazy rags to riches stories abound. More than two decades ago, the oil billionaire Folorunsho Alakija, reputedly the second-richest woman in Africa, was a fashion designer with a high-end clientele that included the then-president’s wife, Maryam Babangida. The story goes that her connection to Babangida led her to be “dashed,” or “gifted” in Nigerian pidgin English, with a license to explore a deep offshore oil block, which was then thought to be too expensive to drill. Today it spews up to 250,000 barrels daily.

The four generations of guests at Balogun’s 80th were all as tied to London as to Lagos, but the younger generations have almost no links to the provincial and traditional Nigeria of Balogun’s generation. While the “chiefs” – as some of the rich old guys are known, based on Yoruba tradition – still speak Yoruba or one of the many other tribal languages, their kids and grandkids have childhood memories involving blancmange or Yorkshire pudding, not dried plantains. The old chiefs sent their children abroad to be schooled and educated. Now those children are adults and are coming home, lured by business returns and fortunes beyond Wall Street’s wildest dreams. The returnees, as they are known, are familiar with the comforts of Western cities, but don’t mind generating their own electricity and paying for private water for their homes. They have a toughness their softer counterparts in the global 1 percent lack. One of the returnees who showed up at Balogun’s party, Kene Mkparu, 47, earned two advanced degrees in London before coming to Lagos with his wife and small children a few years ago. He co-founded Filmhouse Cinemas, which plans to build 25 theaters in Nigeria in the next six years. His kids don’t even notice when the lights flick off. “They just keep on playing,” he said. “It’s frustrating here, because there isn’t a lot of logical thinking. But we are kind of like the Europeans who came here hundreds of years ago. They didn’t let the mosquitoes bother them because they were focused on the gold.”

imageYounger Nigerians see uncharted marketing territory and opportunities to link Africa to the West and vice versa. The publicist Ngozi Omambala moved to Lagos in 2007 after working in the music industry in London. Clients she has worked with include the rapper Ice Prince, who won the 2013 BET Award for Best International Act: Africa, and the Nollywood and Hollywood movie star Hakeem Kae-Kazim. The energy and openness of the Nigerian music scene drew her home after years in London. “I kept coming back here on vacations,” she said. “And I would go home to London, and began to feel that the music lacked a certain vitality. I found that here. One day I just realized that this is where I belong.”

Chinedu Okeke, 29, was born in London and started British boarding school at age 7 (his Nigerian father is a legal advisor for the British government in Abuja). Okeke earned a British law degree and worked in New York, Beijing and Shanghai before moving to Lagos and starting his own branding and production company.

Lakin Ogunbanwo
The artist Nike Davies Okundaye took village indigo batik symbols global.
Young producers like Okeke and Omambala have joined the artist and gallery owner Nike Davies Okundaye as part of a small but growing group promoting Nigerian culture within Nigeria. Okundaye, who goes by her first name, Nike, was one of the wives of a polygamous villager when she was discovered by a curator from the American Museum of Natural History for her indigo-batik skills. She eventually left her husband, and has traveled to the United States many times over the years. In 2009, she opened the Nike Centre for Art and Culture on the edge of Lagos, near the sea. Nigerian art covers four stories of walls in the space. She says returnee Nigerians are more likely to collect, filling their offices with indigenous works. “Most Nigerians won’t buy art,” she said. “They’d rather have a religious icon in their home.”

That inclination against art and culture and toward tradition and religion challenges the young, Western-educated returnees, but doesn’t deter them all.

“I spent most of my life outside and it’s not the best place to live, for many reasons, but it’s never going to change if you are not willing to do your own part to create change,” Okeke said. “I don’t think politics is my thing but I’d rather be involved than complain and be part of the problem.” He conceded that the way business is done in Lagos, especially the closed circle of wealth and the official corruption, is discouraging.

Lakin Ogunbanwo
The Nike Art Gallery is a four-story showcase of Nigerian art.
Some of the more spectacular incidents of apparent corruption include the late military President Sani Abacha’s embezzlement, to the tune of more than $3 billion. He died in 1998, but only in March the United States froze more than $458 million in accounts linked to him. Earlier this year, the Nigerian government said it would audit its petroleum agency after the head of the central bank, who has since been fired, claimed that as much as $20 billion could be missing.

“It’s not as easy to come back as people think it is, and it’s not for everybody. I have had friends come back who haven’t been able to stick it out, there’s lots of stress and things don’t work the way they should,” Okeke said. He recently traveled around Europe and the United States trying to sell a documentary about a Nigerian music festival he produced. For him and some of the younger returnee generation, the lavish spectacles of the old guard are starting to chafe. “The power in Nigeria has remained within the same generation for 40 years. It’s not trickling down. Anybody younger who seems to have power is only there because a chief or a general, one of the set, is behind them. We need a lot of development in Nigeria, infrastructure. Nigeria should be feeding itself. But all the technical know-how and the funding needed is international. And those within the continent that have the money don’t understand how to develop it.”

Still, there are plenty of young people who guiltlessly enjoy the wealth. The chiefs and their wives and children are icons of conspicuous consumption. Nigerian peasants bend on one knee before them. Lagos’s billionaires and multimillionaires spend up to $50 million on long-range jets, and Nigeria has one of the fastest-growing markets for private aircraft in the world.

Their children’s wild pool parties, drinking binges and $250,000 weekend parties in London are local legend. Precious few from this set would think of walking the streets of Lagos; they cruise through in air-conditioned, locked luxury S.U.V.s, sometimes driven by officers wearing the elephant and red eagle insignia of the national police, who divert traffic if necessary to speed their bosses through snarled traffic. And if Lagos gets too hot, or they can’t find a store carrying the Prada bag they want, they fly to Dubai or Cape Town for the weekend.

Lakin Ogunbanwo
The luxury concept store Temple Muse sells African fashion alongside brands like Givenchy and Saint Laurent, food and fashion coffee table books published by Assouline — and Champagne.
Luxury companies like Ermenegildo Zegna, Hugo Boss and Porsche, noticing this trend, have been opening up shop in Lagos. Since 2008, the Nigerian luxury concept store Temple Muse has sold a variety of African and foreign fashion, home and gift brands, including Givenchy, Emilio Pucci, Saint Laurent, Baccarat and Assouline. The Nigerian designer Reni Folawiyo is soon opening a concept store called Alara, designed by the London-based architect David Adjaye, in a three-story red-pigmented building that encloses a series of suspended platforms and staircases. Alara will showcase Nigerian designers as well as European houses.

“Lagos has always been an important hub in Africa and the world – but it is now emerging as one of the world’s foremost metropolitan cities,” Adjaye wrote in an email. “The fact that it can sustain a project like Alara, and others like it, is evidence of its growing wealth, recently improved infrastructure and sense of confidence. We are very much looking forward to the project completing and have been doing some feasibility work on other sites in the city. My hope is that we will continue to work there for years to come.” Indigenous fashion designers are attracting the same crowd. The growing fashion sector, like Nollywood, is indicative of a nation on the cusp of wider prosperity, explains Omoyemi Akerele, the founder of Style House Files, which organizes Lagos Fashion & Design Week. “Retail is key here,” she said. “We need to create opportunities for people to shop. People have nothing. People are returning here, because they see opportunities.”

Lakin Ogunbanwo
At her store on Victoria Island in Lagos, the fashion designer Deola Sagoe infuses African fabrics with Japanese and Italian influences.
The designer Deola Sagoe has been working in Lagos for more than 20 years. Sagoe, dressed in a royal blue silk wrap blouse and black velvet leggings with a giant aquamarine on one hand, met me in her store, a two-story sleek glass building located in bustling Victoria Island. Even though the district is one of the wealthier areas, many of the streets are rutted and the sidewalks cracked – if they are there at all. She consults with clients in a room with French velvet-upholstered chairs, and then leads them back into her studio, with walls of fabric she designs and has handmade in Nigerian villages on 11th-century looms. The traditional fabrics share wall space with newer pieces she designs, like deep blue indigo-dyed silks, that she uses to create garments with an Afro-Asian-Italian aesthetic.

Sagoe, the daughter of a major Nigerian industrialist, grew up traveling frequently to Italy and Japan and went to college in the United States. She took up fashion against the wishes of her father, who – like all Nigerian parents, she said – wanted his children to go into business and make money. Until quite recently, she noted, fashion was looked down upon as a career in her set. Wealthy Nigerian women only went to Nigerian designers for traditional gowns and headdresses needed for formal affairs.

imageSagoe – and other Nigerian designers who’ve come after her – are changing that culture. “People used to go to Paris and buy, but not buy it here,” Sagoe said. “If they did, they would haggle about the price, because there wasn’t a tradition of fashion, but of tailors.” She employs hand-weavers and dyers in remote villages, but she can’t produce clothes on a larger scale inside Nigeria, because the substandard power grid can’t support factories. Nonetheless, she brought her three daughters into the business, and is expanding. “Africa is my foundation,” she said. “Nigerians are expressive and proud. Looking good is good business.”

Lakin Ogunbanwo
Maki Oh incorporates traditional combinations of color, embellishments and motifs that, in Africa, have profound meaning and have recently caught the attention of the LVMH Young Fashion Designer Prize judges.
The designer Amaka Osakwe, 28, caught the attention of the judges of the inaugural LVMH Young Fashion Designer Prize this year with her sleek silhouettes that merge traditional symbols and craftsmanship with modern looks. “Each piece has a meaning,” she wrote in an email about her line, called Maki Oh, which placed in the competition’s semifinals. “Traditionally, the colors, embellishments, motifs, etc. of garments were used to pass messages. For example, a piece of Adire cloth with the traditional Adire motif called ‘Mat’ (which features hand-drawn lines which to the untrained eye may resemble a checkered pattern) was often presented as a wedding gift.” The pattern, she continued, symbolized the hope “that the couple may be blessed with children shortly after they lay on a mat/bed in their home. This notion of passing messages through garments is what we consider when we decide the length of a skirt, the motif, the color of an embellishment. This is why research is key.”

Maki Oh, Deola Sagoe and Folake Folarin-Coker, the designer behind Nigeria’s thriving Tiffany Amber brand, exist to serve the wives, daughters and girlfriends of the business titans and wealthy returnees like the 49-year-old television talk-show host Mo Abudu, a former oil company human resources executive now known as the “Oprah of Africa.” Abudu, who was born in London and educated in Britain, moved to Lagos a few years after she got married. She started her talk show in 2006, and has interviewed the likes of Hillary Rodham Clinton and Christine Lagarde, the head of the International Monetary Fund, but she’s chiefly an unabashed Africa-promoter. She recently launched a pan-African television network, EbonyLife TV.

Lakin Ogunbanwo
Before embarking on a career in fashion, Folake Folarin-Coker studied law. Now, she’s the fashion designer behind the successful brand Tiffany Amber.
When we met for lunch, Abudu, who calls herself an Afro-politan media entrepreneur, was accessorized in Saint Laurent platforms and a Birkin bag.

Abudu said she’s living in Lagos because “it’s Africa’s time” now. “Westerners are more interested in war, genocide, rape and H.I.V.,” she said. “You would think if you listened to Western media that every other person in Africa has H.I.V. For me, that’s boring. And there’s a business angle. African brands must recognize that if you want to be global, your environment must be considered with respect.

“Everything in Africa is so virgin right now. There is so much interest. Big media are all putting together their Africa strategy. We love American movies, but want to see our stories. Their approach to Africa is like, we want to go to the moon. Don’t make us look shallow and all about the money. There’s a lot of hard work going on.”

Abudu and other Nigerian returnees know their country’s reputation isn’t getting any better. Polio remains endemic in the northern states, where several vaccination workers were killed in attacks last February that were thought to have been carried out by the extremist sect Boko Haram. The group, whose name means “Western education is forbidden,” also claimed responsibility for a bus station bombing that killed dozens last week in the capital city of Abuja, and is suspected in the kidnapping of about 200 schoolgirls from a northeastern town a day later.

“This country has the biggest G.D.P. in Africa,” one oil industry expat said at the Lagos Yacht Club, a hangout where British and Nigerian sailors sip gin and tonics. “But no 24-hour power. Where is it? The scale and quantity of what has happened here is tragic. The people are fundamentally peaceful. They just want the basics – water and power.”

One young investment banker educated in the United States who had worked on Wall Street traded in his suit for the traditional linen gown and trousers, and now works in his family’s investment firm in Lagos. He pointed out that some of Nigeria’s problems stem from the newness and insecurity of the private fortunes. “This level of wealth is a generation deep,” he said. “You have a Lamborghini. Where do you drive it? The roads are terrible. You take it out on Sundays and carefully drive it to a hotel for lunch, then bring it home.”

The culture of philanthropy is growing among Nigerians and the great chiefs do return some of their fortunes to the people. Banker Balogun donated one of the largest pediatric hospitals in Africa to the medical school of the Universtiy of Ibadan. Africa’s wealthiest businessman, the billionaire cement mogul Aliko Dangote, has donated significant sums to programs to build Nigerian small businesses, and he gave millions to help Nigerian flood victims.

I asked Balogun whether returning elites might portend improvements in Nigerian infrastructure and social welfare. He said the country’s problems stem from a postcolonial backlash against foreign involvement.

“I’m 80, so I can give you my views without fear,” he said. “The country needs a thorough transformation. After independence, we used to think the best thing was to get Nigerians into the commanding heights. We started with what I call a morbid dislike for foreign acquisition of what we believed was our own enterprise. It would be good if we could move away from that and allow highly reputed, successful business entrepreneurs to partner with us in developing the
Chief Sonny Iwedike Odogwu invited me in for an audience at his labyrinthine gated palace with hand-tooled Moroccan filigree ceilings, on the palm-lined but rutted Queen’s Drive. On the day we pulled up to the guard house, a water main was broken on the street, and we splashed through a foot of muddy water as we pulled up. Like Balogun, Odogwu is also in his 80s, and made his fortune as the oil and gas industry developed. He founded one of the first Nigerian insurance brokerages (Dyson & Diket), and insured the oil sector’s assets. On the day we met, he wore a spotless, starched white linen robe with gold threads, and was perched on a long couch in one of the grand sitting rooms in his mansion (a room in the basement seats 700), considering the pleas of a pair of women from the fashion council, who were proposing that he finance a Brazilian-Nigerian fashion expo they wanted to attend.

Odogwu, like many of the old guard, is a very religious man. He has donated millions to the Catholic Church and is particularly proud of photographs of him and his wife in the Vatican earlier this year, renewing their marriage vows in front of Pope Francis. He believes they are the first African couple to have the Pope officiate at a marriage renewal ceremony.

I asked him whether he thought the vast fortunes he and his friends control would or should trickle down to develop Nigeria. Odogwu suggested that religion – not politics – was the answer to problems with Nigeria’s wealth distribution issues. “There are lots of religious organizations here,” he said. “They do a lot and we give them a lot of money. Instead of telling people what they don’t have, they help them out of their frustration, and make them believe that their way of life is better than in the west.” Spiritual balm for the masses, he said, was one good reason for him and his fellow elites to pile the collection plate high on Sundays.

Wall Street News

Market Flash: Market Up
From The Trading Floor: Stocks are trading well into the green this morning, poised for a weekly gain ahead of some select index rebalancing and a quad witch expiration that is expected to be large

Wall Street Impressions presented by European Court Experts

Wall Street Impressions presented by European Court Experts

Fitch has raised the U.S.’s outlook to „stable“ while affirming the country’s AAA rating, citing the suspension of the debt limit last month and strong fiscal consolidation as reasons for the move.
29 of 30 Banks passed the most recent stress tests with Zions Bancorp falling a bit short
Nike’s FQ3 earnings beat consensus as the company enjoyed rising sales in China and Western Europe, while it also said orders have soared ahead of this summer’s soccer World Cup. Guidance has them trading down this morning.
The cost of implementing the Volcker Rule could vary from $413M to $4.3B for banks supervised by the Office of the Comptroller of the Currency, an OCC study calculates, as the regulations force banks to sell restricted investments at a loss.
Today is a quad witch expiration day which is the simultaneous expiration of futures on stock indexes and individual stocks, and stock and stock index options. It is also a quarterly rebalance on some S&P and Nasdaq indexes
Russia’s Micex stock index was down this morning after the U.S. threatened sanctions against vital parts of the country’s economy, including the financial-services, energy and mining sectors. The U.S. also imposed asset freezes and visa bans on senior Russian officials and businessmen close to Vladimir Putin.
Italian industrial orders jumped 4.8% on month in January after sinking 4.8% in December, while industrial sales rose 1.2% vs -0.3%. The figures add to better-than-expected output in January and suggest that Italy’s fragile recovery may be taking hold.
Resistance today looks to be 1880 / 1883 with support at 1867 / 1870
Market Flash:Market Mixed / Positive
From The Trading Floor: Equities are trading mixed to positive this morning as the effects of Janet Yellen’s suggestion of a sooner-than-expected rate hike the prior session is measured against economic reports on employment and housing.

imageThe number of Americans filing applications for unemployment benefits last week increased by 5000 to 320,000
The Fed is due to release the results of its annual stress test on 30 banks today, with most expected to pass
Americans were most pessimistic on the outlook for the economy in March than at any time in the past 4 months
February home sales in the U.S. fell to a 4.60 million rate
The Index of Leading Indicators rose 0.5% in February, a sign the world’s largest economy will strengthen after the weather induced slowdown
Q2 Holdings priced 7.7 million shares at $13.00. The opening print was $16.25 on 1,584,231 shares.
Ukraine plans to pull its troops out of Crimea in what is effectively a de facto acceptance of Russia’s annexation of the province.
The State Council intends to accelerate construction projects and enact other measures to expand domestic demand and stabilize growth. The plan comes amid data which suggests that the economy is softening.
From a technical standpoint, resistance looks to be 1866 / 1869 with support at 1856 / 1859
Market Flash: Market Mixed
From The Trading Floor: Markets are trading in mixed territory this morning as traders are unwilling to make bets ahead of the FOMC rate decision and Janet Yellen’s first press conference at 2:00 today.

Mortgage Applications for the week ending March 14th fell -1.2%
Current account gap fell to $81.1 billion from 96.4 billion
The FOMC rate decision is at 2:00 today. With the Fed expected to taper some more and abandon its 6.5% unemployment threshold for considering rate hikes, punters are focusing on what would push the Fed to finally raise rates.
Japan’s trade deficit narrowed to ¥800.3B ($7.9B) in February from a record ¥2.79T in January but exceeded consensus of ¥590B. Import growth slowed to 9% from 25% while exports rose 9.9%. Japan has now experienced a record 20 consecutive trade deficits, and while the figure may have peaked, few economists expect the country to turn a surplus any time soon.
From a technical perspective, resistance is at the 1877 / 1880 level with support at 1863 / 1866