Emerging markets: Pros enter, amateurs depart. Many professional traders are moving cash into emerging market investments even as nervous investors pull back. During a recent week, investors pulled a record $10.7B out of emerging market funds. Meanwhile ING Groep (NYSE:ING) upped its emerging market allocations to 14% from 8%, and Citigroup's (NYSE:C) Global Wealth Management raised its recommended allocation. Mexico is the most vulnerable to a U.S. slowdown, while Brazil and Peru stand to gain from high copper prices.
Investors ease on rate-cut hopes. Fed-funds futures reveal a modest decline in aggressive rate-cut expectations. The April contract now prices in a 72% chance for 75 BP ease to 2.25% at the March 18 FOMC meeting, down from 74% yesterday. A 50 BP cut is fully factored in.
Googlers vent. "The management within Google (NASDAQ:GOOG), especially AdWords and AdSense (the money making machines of the entire company ... engineering gets the glory but advertising brings in the big bucks) are completely disorganized and chaotic (in a BAD way)." AdWorders make a mere $45,000 base, and everyone hates their job, an insider claims. Another gem: "It really is a crazy system because everyone is cut throat and if you happen to land a good project or get an opportunity people really try to bring you down."
Potential meltdown of BMO trusts. Bank of Montreal (NYSE:BMO) was unable to restructure two asset-backed commercial trusts it sponsors, which means the trusts may suffer a meltdown as early as today if creditors seize their assets. The trusts face over $500M in margin calls. "If a bank like BMO is ready to suffer the public embarrassment of letting its conduits melt down, this is a clear indication of a very tough time in the market," an analyst said.
Nokia takes on Silverlight. Nokia (NYSE:NOK) will use Microsoft's (NASDAQ:MSFT) Silverlight to develop applications for its S60 and Series 40 mobile devices. Launched in September, Silverlight is trying to catch up to Adobe's (NASDAQ:ADBE) Flash Player, which dominates the market. Adobe and Nokia signed a deal last year for the Flash Lite player; it is unclear how the new agreement will affect their previous relationship.
Google Gears enable offline mobile apps. "Ever use a mobile web application and suddenly lose your cell connection?" Google Gears for mobile wants to make such traumas a thing of the past by allowing users to access mobile apps offline. Of note: The first beneficiary of mobile Google Gears is Microsoft's (MSFT) Windows Mobile OS, not Nokia (NOK)-supported Symbian nor Google's own Android.
Sony to bridge another LCD TV alliance. A source says Sony (NYSE:SNE) and Samsung will invest about $1.9B in a joint flatscreen LCD production line. Last week Sony took a 33% stake in Sharp's planned $3.5B LCD panel plant. Sony is partnering with numerous suppliers in its bid to supplant Samsung as the #1 LCD TV maker. At the same time, plasma TV makers are cutting back on production.
Even Best Buy will struggle. Banc of America cut Best Buy (NYSE:BBY) to neutral from buy. "BBY is a great company but from an industry standpoint, many factors that drove Best Buy's 2007 outperformance will reverse." Soft demand will be exacerbated by overly optimistic TV production, pressuring margins, it says. And Circuit City's (NYSE:CC) "need for relevance could cause a turbulent promotional environment this year." BofA cut its price target by $6 to $41.
iTunes video shortfall. Despite promising 1,000 iTunes movie rentals by January, only 384 movies are available, and only 91 of those are high-def. Total movies available, including for purchase, are only 770. The deficit calls into question how seriously Apple (NASDAQ:AAPL) meant its aggressive claim that it "has it right this time."
Barclays gets tap on shoulder. Barclays (NYSE:BCS) said it has been contacted by the New York district attorney and the DoJ over potential breaches of rules that ban banks from doing business with "terrorist blacklist" states, including Cuba, North Korea and Iran. In notes to its 2007 results, Barclays warned "the potential financial effect of any resolution could be substantial."
CME rival gets another backer. Goldman Sachs (NYSE:GS) will likely join a consortium seeking to open an exchange that competes against the CME (NASDAQ:CME). JPMorgan (NYSE:JPM) and Deutsche Bank (NYSE:DB) are also participating, and eSpeed (ESPD) will run the exchange's backend. Firms yet to sign on include Lehman (LEH), UBS (NYSE:UBS) and Morgan Stanley (NYSE:MS). The much-rumored exchange may become official as early as this week.
Bankruptcy filings jump. Consumer bankruptcies surged 15% M/M in February to 76,120, and were up 37% from a year ago -- the single highest month since 2005 bankruptcy law changes. The American Bankruptcy Institute forecasts more than 1 million consumer bankruptcies in 2008, compared with about 800,000 in 2007, due mostly to heavy household debt.
Continental buys Heathrow slots. Continental (NYSE:CAL) paid a record $209M for four pairs of takeoff and landing slots at London's Heathrow airport. Continental paid $116M for summer slots and $93M for winter slots.
Now you see it... The Sharper Image (SHRP) gift cards you received over the holidays are worthless for now, and will stay that way unless the company miraculously emerges from Chapter 11. Bankruptcy laws treat gift cards as loans, not cash.
SaaS adoption on the rise. Twenty one percent of U.S. small businesses [SM] and 31% of medium businesses [MB] currently use SaaS (Software as a Service) web-based enterprise applications. The good news for SaaS developers -- such as incumbents salesforce.com (NYSE:CRM) and Concur Technologies (NASDAQ:CNQR), and relative newcomers SAP AG (NYSE:SAP), International Business Machines (NYSE:IBM), Google (GOOG) and Microsoft (MSFT) -- is that MB growth, which tends to be more lucrative, is far outpacing SB growth.
Fnac's iPhone attack. Fnac says Apple's (AAPL) exclusive deal with France Telecom's (FTE) Orange to sell its iPhones is indefensible. Fnac is in talks with Apple to distribute the phone. If that fails, Fnac would consider going to court.
Bank, retailer don't see eye to eye. Neiman Marcus is suing HSBC (HBC) for breach of contract after HBC moved to increase credit card charges and interest rates. HSBC paid Neiman $640M in 2005 to take over its credit card accounts for five years.