Roundup: S&P -0.08%, Dow -0.07%, Nasdaq +0.37%, London -0.06%, Germany +0.19%, France -0.17%. At pixel: Nikkei -0.12%, Hang Seng +0.66%
This could be huge: RBI is looking to offer CPI linked bonds. Inflation-linked bonds currently available are linked to wholesale price indices and they have not taken off in a big way. (ET)
Trading volumes on MCX, the country’s largest commodity exchange, has fallen by a whopping 70% over the past five months. Overall, total futures turnover of six commodity exchanges, including MCX, has fallen by 54% over the same period. (ET) [stockquote]MCX[/stockquote][stockquote]FINANTECH[/stockquote]
Why is sugar such a boondoggle?
Bad economics: In the past three years, sugar prices have fallen about 10% but cane prices, fixed by politicians, rose 37% in two years.
Millers in Utter Pradesh: “This could evolve into a transformational period where we either make the policy of fixing cane price rational, or sound the death knell for the sugar industry.”
Farmer in Karnataka: “Depressed for failing to repay the debt, Arabhavi went behind the stage where farmers were demonstrating since Monday for arrear payment and higher support price from the state government, and consumed a pesticide.”
Meanwhile, in the US: The U.S. government is being forced to support sugar companies even though taxpayers are already footing a $280 million bill stemming from loans the companies can’t repay. A glut of sugar over the past year sent prices plummeting, sparking the biggest wave of loan defaults among sugar processors since 2000. In total, processors defaulted on $171.5 million in 2013, even after the USDA spent $106.7 million buying sugar to boost prices.
WWJD: What Will Janet Do?
For more than four years, the stock market’s main fuel has been the Federal Reserve’s willingness to provide various forms of financial stimulus, which currently consists of $85 billion in monthly bond-buying. The Fed is expected to begin trimming that stimulus at some point. But based on incoming Chairwoman Janet Yellen’s soothing comments at her confirmation hearings, many investors think she will wait longer to make cuts, and go slower, than current Chairman Ben Bernanke would. Ms. Yellen takes office Feb. 1 (WSJ)
Amazon is experimenting with fulfilling small orders (5 pounds or less) using autonomous drone aircraft. The drone service, called Prime Air, is expected to go live in 4-5 years.