20 June 2019 FT — Articles to Read

Question: According to MSN: Money, which state has the lowest credit score?

Fed holds rates but dovish shift prepares ground for cuts – Pg. 1

  • …the Fed said it would “act as appropriate to sustain the expansion”…
  • This marked a change compared with previous language in which the Fed said it would simply be “patients” in determining changes to interest rate policy.  The Fed also downgraded its description of the health of the US economy, saying activity was rising at a “moderate rate” – a less rosy picture than the “solid rate” of expansion it saw in May – and noted that inflation continued to run below its 2% target
  • ….economic projections released by the US central bank along with its statement suggested that interest rate cuts might not happen before next year

HSBC becomes one of WeWork’s biggest tenants – Pg. 13

  • …agreeing to lease more than 1,000 desks in London at what the shared office provider says will be the world’s largest co-working space
  • The UK bank was to take 1,135 desks on a multiyear agreement at the US Grup’s Two Southbank Place development in Waterloo,….
  • The deal makes HSBC – which also occupies WeWork space in Hong Kong and elsewhere – one of the shared office provider’s largest tenants
  • …agreement was the latest sign of WeWork competing with traditional landlords as it seeks to attract large teams from big groups alongside start-ups and small firms
  • WeWork, which has grown rapidly to more than 400 locations, says four in 10 of its members are from bigger companies
  • WeWork, along with rivals such as IWG, Knotel, Convene and The Office Group, takes long leases on buildings which it refurbishes and lets on all-inclusive contracts for much shorter periods than traditional landlords.  It has also begun buying buildings, but these remain a small part of its portfolio
  • Standard & Poor’s, the rating agency, earlier this year noted a “duration mismatch between the long-term leases and the monthly member contracts”…. (Prof Note: Sounds a lot like the asset/liability mismatch with banks….)

Value of negative yielding debt hits high of $12.5tn on signals of ECB stimulus – Pg. 19

  • The universe of negative-yielding bonds has jumped to a new record of $12.5tn after the ECB stoked the global fixed income rally by hinting that it could restart its “quantitative easing” programme
  • The US Federal Reserve is expected to cut interest rates three times or more this year…
  • The average yield of the global bond market is now just 1.76%, down from 2.51% in November last year

Answer: Mississippi (652)