Reuters Insider - Inside the News: Brazil's Rousseff Looks to Woo Wall Street
13/06/2016 11:03
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Source: Thomson Reuters
Description: In her first day in office, Brazilian President
Dilma Rousseff is already sending market-friendly
signals, announcing budget cuts and courting
sources of foreign investment.
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Transcript (May be auto-generated)
Let's go Inside the News at noon. US stocks are surging, lifting the NASDAQ 100
to a 10-year high. Investors are betting a 2010 rally will continue in the New
Year. Equities are also being given a helping hand from factory and housing
data, pointing to a strengthening recovery. If the S&P ends up 1% on the day or
more, it's a sign of a bullish year to come according to Schaeffer's Investment
Research. Shares of Bank of America are still up nearly 5%. The firm announced
it would pay more than $2.5 billion to Fannie Mae and Freddie Mac to resolve
issues with mortgages sold to them by Countrywide Financial. Paul Miller,
Banking Analyst at FBR Capital Markets, says we could see more settlements like
this in the banking industry. Even now that you see BofA settling, which had
probably the worst pool of loans coming out of the Countrywide pool, you can see
was settled for a reasonable amount. And now, you're probably gonna see
something like a JP Morgan go, you know, try to come out with the same type of
deal to get rid of that liability. But what investors now have is confidence
that the GSE liability is nowhere near as bad as what a lot of these doomsayers
are out there saying. US copper prices have hit a new record high near $4.50 per
pound. Prices boosted by bullish US economic data and signs of sustainable
growth in China.
Reuters Commodities Specialist Christopher Henwood warns that at these levels
the base metal is ripe for a correction. If prices start to retreat, Henwood is
looking at $4.30 for support. It's Dilma Rousseff's first day on the job as
Brazil's President. She's already sending out market-friendly signals with the
proposal to cut the budget by about $15 billion. Reuters Brazil Chief
Correspondent Brian Winter is in Sao Paolo. So Brian, why is she hitting the
ground running so hard on this issue? Well, Dilma Rousseff has grand ambitions
for her four year presidency and she knows that she's gonna need Wall Street's
support in order to make those happen. She talked on her inaugural speech on
Saturday about really big ideas such as lifting about 12 million Brazilians out
of extreme poverty by the time the decade is over. She also needs to marshal
together foreign capital to invest in infrastructure ahead of the 2014 World
Cup, 2016 Olympic Games, and also just to keep pace with the fact that the
economy's growing so fast. Really the next step though is to make sure that
she'll be able to follow through on this spending cut; she's gonna have to push
them through Congress. It's not gonna be easy and it's gonna be an early test of
her leadership here in these next weeks and months. All right, Brian Winter in
Sao Paulo, thank you so much. The Fed's wrapped up another round of bond
purchases, scooping up $7.79 billion of treasuries maturing between February
2018 and August 2020. This is the Fed's fifth pass at this sector since
launching QE2. It was also the lowest amount offered up for sale yet with
dealers submitting just over $17 billion worth. The biggest purchase was in
what's developed as the Fed's favorite of the bunch and off the run, 10-year
note issued in August 2009. Coming up at 12:30, Reuters Breakingviews US Editor
Rob Cox says Goldman Sachs maybe kicking of 2011 with a fresh conflict by
investing in Facebook. At 1PM, Reuters Quantitative Analyst Mike Tarsala will
dig deeper into the Bank of America settlement. I'm Jen Rogers. This is Reuters
Insider