Daily Agenda: Dollar and Yen Neck-and-Neck; Ackman Goes Chipotle

Markets react to a lower chance of Fed action this month; Apple to debut new products in major event; U.S. Department of Education shuts down ITT Tech.


The MSCI emerging markets index reached the highest level in more than a year this morning ,as commodity and currency markets discounted the likelihood of a Federal Reserve rate hike later this month. At the same time that the anticipated actions of the Federal Open Market Committee are driving many markets, the Bank of Japan’s ability to accomplish its objectives appears to have been discounted by many traders. The yen is now up for a third day capping a more than 2 percent rise versus the U.S. dollar since the start of the week. In some ways this focus on central banks by investors on central bank policy may reflect a failure in the recent Group of 20 meeting to catapult fiscal policy expectations beyond those of monetary actions, a reoccurring theme in recent years. As the autumn begins the message being sent by financial markets appears to be that the Bankers remain the primary driver for market direction.

Apple to debut new phone. Today Apple Inc. will host an event in San Francisco featuring new products that will include a new generation smartphone, according to industry analysts. The technology giant is expected to roll out the iPhone 7 as well as other new devices. Separately, a parliamentary session in Ireland earlier today focused on that nation’s next step in challenging a European Commission tax ruling against the company.

For-profit tech school shutters. Yesterday ITT Educational Services Inc. closed the doors on more than 40,000 students as it complied with demand from the Department of Education. The company was unable to meet capital demands placed by regulators to cover risks associated with federally guaranteed student loans. Company management have protested the department’s actions as illegal.

Ackman takes stake in Chipotle. In a regulatory filing yesterday, Bill Ackman’s hedge fund firm Pershing Square Holdings, revealed a nearly 10 percent stake holding in Chipotle Mexican Grill. The activist investor, who has had a checkered past in concentrated holdings including multilevel marketing dietary supplement firm Herbalife, is wagering on a turnaround for Chipotle, which recently has been beset by public health concerns.