- ASX SPI 200 futures down 0.2% to 7,241.00
- Dow Average up 0.2% to 34,585.35
- Aussie down 0.3% to 0.6817 per US$
- U.S. 10-year yield fell 2.4bps to 3.8068%
- Australia 3-year bond yield rose 0.5 bps to 3.91%
- Australia 10-year bond yield fell 1 bp to 3.99%
- Gold spot little changed at $1,955.06
- Brent futures down 1.8% to $78.46/bbl
- 11:30: (AU) RBA Minutes of July Policy Meeting
US stocks resumed a rally as investors weighed bets the Federal Reserve is approaching the end of its interest-rate hikes against evidence pointing to a slowdown in China’s economy.
The S&P 500 gained 0.4% and the tech-heavy Nasdaq 100 rose 0.8%, adding to last week’s historic gains amid optimism the Fed may soon be able to claim victory over inflation.
Activision Blizzard Inc. rose after Microsoft Corp. and British regulators held “productive” talks needed to clear the companies’ $69 billion tieup. Ford Motor Co. fell after cutting the price on the electric version of its F-150 truck. The dollar fluctuated, and equities in Europe and mainland China declined after gross domestic product in China grew at a slower-than-expected pace in the second quarter, increasing risks likely to hit the global economy.
“Many countries do depend on strong Chinese growth to promote growth in their own economies, particularly countries in Asia, and slow growth in China can have some negative spillovers for the United States,” Treasury Secretary Janet Yellen said in a Bloomberg TV interview on Monday. “Growth has slowed, but our labor market continues to be quite strong. I don’t expect a recession.”
For a time, analysts believed Chinese shoppers coming out of Covid lockdowns would be able to carry the global economy — despite rising US and European interest rates. However, that narrative is looking increasingly shaky.
Yellen said she sees the US on a “good path” to bringing down inflation without a major weakening in the labor market.
Last week stocks and bonds rallied after data showed a slowdown in the rate of inflation.
The next pressure point for markets will be earnings, with hundreds of companies reporting over the next few weeks. S&P 500 firms are expected to post a 9% drop in profits in the second quarter, making it the worst season since 2020, according to data compiled by Bloomberg Intelligence. In Europe, it may be even worse, with a projected 12% slump.
In commodities, crude futures dropped as traders weighed disappointing Chinese data and restarting Libyan supplies against signs of a tightening market. Wheat futures jumped after Russia terminated a grain-export deal, jeopardizing a key trade route from Ukraine. And gold was little changed.
Fifteen years after the collapse of Bear Stearns Cos., one of the final mysteries shrouding the demise of the Wall Street behemoth has finally been solved.
The night JPMorgan Chase & Co. agreed to buy the bank for $2 a share, a $2 bill was taped to the revolving door of Bear Stearns’s headquarters — a prank that created one of the defining images of the financial crisis. But the people behind it remained a secret.
Dealbreaker was the first to publish the image, and Gawker quickly followed, describing it as “an editorial comment from an unknown Bear Stearns employee” on the risible sale price for a one-time stalwart of Wall Street. (JPMorgan raised the offer to $10 a share a week later following a shareholder revolt).
In reality, the prank was committed by three then-20-something year-old friends and former Columbia University roommates who had no direct ties to the firm. While one of them — Bartek Ringwelski — had been an analyst at UBS Group AG until 2007, and another — Alex Davidov — went on to spend four years at Bridgewater Associates, their careers have been more focused on tech than Wall Street.
“We were joking around, ‘Wouldn’t it be funny to tape a $2 bill to the headquarters?’” Ringwelski, now the founder of a venture fund, said by phone. “Our goal at the time was to get this into Dealbreaker.”
Davidov happened to have a stack of eighteen $2 bills that he’d been gifted for his bar mitzvah; he kept them in a box that bounced around with him all the way to his Brooklyn apartment.
Armed with one of the unusual bills and packing tape, the three men descended on Bear’s Madison Avenue headquarters late in the evening on the March night that JPMorgan announced its offer. Davidov and Andrew McDaniel took the subway from Brooklyn, while Ringwelski walked over from his midtown apartment.
“There were surprisingly not many people around the building,” McDaniel said. “So we just taped it to the door and took a few pictures ourselves. And then we emailed it to Dealbreaker.”
McDaniel emailed the photos from an anonymous account he set up for the prank: Sexyjefferson@nullyahoo.com.
Emails sent by the friends and reviewed by Bloomberg, as well as between the Yahoo account and Bess Levin, a Dealbreaker blogger at the time, corroborate their story.
“I can’t think of a photo that better encapsulates the ‘08 crisis than the photo of the two bucks scotch-taped to the door of Bear Stearns,” said Levin, now a politics correspondent for Vanity Fair. “Except maybe that photo of the Lehman Brothers bankers lined up in front of the window in London like they were facing a firing squad.”
The trio never expected their prank would go beyond the blogosphere, but once professional photographers spotted the bill, the image was plastered on news sites including Reuters and the Wall Street Journal, which deemed it one of the top photos of 2008.
News outlets usually rely on rote pictures for banks in the news, said Davidov, who also works at a venture fund.
“What do you use as an image? A logo, a skyscraper?” he said. “The media needs something that’s more exciting, and we created this.”
For the Bear Stearns employees who worked at the company’s Madison Avenue offices, thousands of whom would be fired over the next few months, the image of the $2 bill stuck indelibly in their minds.
“It stunned people as they walked in,” said Kathryn Rooney Vera, who was an analyst at Bear at the time. “It was a tangible and visual manifestation of the magnitude of the fall of this major Wall Street bank — a powerhouse reduced down to this obscure $2 bill. I’ll never forget it.”
The trio struck again a year later, when Citigroup Inc. stock fell below $1.
One of Davidov’s $2 bills was torn in half and taped to the door of the bank’s midtown skyscraper, and McDaniel again sent an image to Dealbreaker.
While it was published, the second prank didn’t gain the same traction.