Monday Minute 2/8/2016

News from around the web.

China group to buy Chicago Stock Exchange


One of America’s oldest stock exchanges has just been sold to China.

The 134-year-old Chicago Stock Exchange reached a deal on Friday to be acquired by a Chinese-led group of investors.

The purchase by Chongqing Casin Enterprise Group is the latest U.S. investment made by China and would give the country a foothold in the vast American stock market.

The struggling Chicago Stock Exchange is a very small player in the exchange world whose presence is overshadowed by Nasdaq (NDAQ), the iconic New York Stock Exchange and newer entrants.

As of January, the Chicago Stock Exchange handled just 0.5% of U.S. trading, making it the third-smallest U.S. exchange, according to TABB Group.

Terms of the Chicago acquisition were not released. Privately-held Casin Group was founded in 1997 and has investments in real estate, environmental protection, finance and other areas. The Chicago Stock Exchange is minority-owned by a group that includes Bank of America (BAC), E*Trade (ETFC), Goldman Sachs (GS) and JPMorgan Chase (JPM).

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European Stocks Fall, Credit Weakens as Signs of Distress Abound

By STEPHEN KIRKLAND, Bloomberg Business

Signs of distress in financial markets are gathering force as concern over the state of the global economy deepens.

European stocks are down for a sixth day and the cost of protecting European banks’ and insurers’ senior debt is on its worst run since March 2013. In addition, yields on bonds for Europe’s most-indebted countries are rising, while the rate on Germany’s 10-year bunds are at the lowest since April. Oil fell below $30 a barrel and nickel is trading at its weakest level since 2003 as supply exceeds slowing demand. Futures point to declines in U.S. shares amid a retreat in emerging markets.

“Investors can’t make up their minds about the global economy, but the risk of recession and deflation is rising,” said Francois Savary, the chief investment officer of Prime Partners SA, a Geneva-based investment manager. “It’s not enough that valuations have receded quite significantly and earnings haven’t been too bad — sentiment is very low and there isn’t much visibility right now. That’s frightening.”

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Star Wars powers Hasbro’s strongest growth in nearly 5 years


Feb 8 Hasbro Inc reported its biggest jump in quarterly revenue in nearly five years, beating analysts’ estimates by a wide margin, driven by demand for toys based on the “Star Wars: The Force Awakens” and “Jurassic World” movies.

Revenue from toys targeted at boys, which include action figures based on the two blockbuster films released last year, surged 35 percent to $569.8 million in the fourth quarter.

Industry-wide sales of Star Wars-licensed merchandise totaled about $700 million in the United States in 2015, according to retail research firm NPD Group.

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Goldman Sachs Says Defy ‘Mr. Market’ as Recession Risk Still Low

By SIMON KENNEDY, Bloomberg Business

Goldman Sachs Group Inc. is betting “Mr. Market” is wrong in its recession warnings.

While sliding stocks, declining long-term bond rates and higher credit yields are sounding the alert, the New York-based bank’s economics team led by Jan Hatzius is more confident about the outlook for the developed world.

Their model, based on a series of economic and market indicators, points to just a 25 percent risk of recession in the industrial economies in the next four quarters and 34 percent over the next two years. Both undershoot the average risk of the past 35 years despite the recent fears of financial markets.

The probability of a slump in the U.S. is just 18 percent and 23 percent over the two timeframes respectively, while the euro-area threat is greater at 24 percent and 38 percent, according to Goldman Sachs.

“The recent market weakness should provide good risk-adjusted opportunities for those brave enough to defy Mr. Market’s gloomy prognosis about the world economy,” Hatzius and colleagues said in a weekend report.

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