Daily Agenda: OECD Reduces Global Expectations

PBOC makes daily market operations permanent; Deutsche analyst settles with SEC; S&P downgrades Anglo American.


In a report issued today, the Organization for Economic Cooperation and Development lowered growth forecasts based on slowing global demand. The OECD lowered the growth target to 3 percent for aggregate world gross domestic product, cutting back expectations for economies in both developed and emerging worlds. The organization joins a growing body of economic think tanks focused on sluggish demand for basic commodities that continues to dampen inflation expectations despite central bank intervention.

PBOC to enter markets on daily basis. In a statement released today, policymakers from the People’s Bank of China announced that the central bank will execute open-market operations on a daily basis. The move comes after several months of temporary daily cash market operations instead of the traditional twice-weekly showings.

SEC unveils settlement with analyst. Yesterday the Securities and Exchange Commission announced a settlement with a research analyst that the agency charged with issuing a report on a public company with conclusions that did not reflect his opinion. According to the SEC, a report on retailer Big Lots released by Deutsche Bank analyst Charles Grom in March 2012 retained a buy recommendation despite his misgivings over the firm’s prospects in order to protect the bank’s investment banking relationship with the company. Grom agreed to a $100,000 fine and one-year suspension from the industry to settle the charges.

S&P cuts Anglo American to junk. Standard and Poor’s joined Moody’s and Fitch in lowering the credit rating of beleaguered mining giant Anglo American to below-investment grade. The London–based company has announced intentions to sell assets in a move to shore up its capital base.

Nestlé disappoints investors. Nestlé announced disappointing financial results today with full-year net income declining by 37 percent in 2015 as a combination of macro factors including a strong franc eroded margins. The Vevey, Switzerland–based food company guided expectations lower for the coming year and failed to deliver a much-anticipated share repurchase program.

Biggest retailer dials down expectations. Wal-Mart Stores Inc. today announced fourth-quarter 2015 financial results with earnings that beat consensus analyst estimates despite weaker than expected revenues. Critically, the Bentonville, Arkansas–headquartered retailer said that it anticipates flat sales growth for the current year. Management at the firm cited competition from online retailers, a strong U.S. dollar and other headwinds in issuing the guidance.

Jobless claims drop to lowest level in months. Weekly initial jobless claims data released today by the Department of Labor registered at 262,000, a decline of 7,000 from the prior week’s reading. The figures were better than consensus economist estimates and marked the lowest level since November of last year.