Fed Officials Give Rate Timetables
When looking at interest rates, timing isn’t necessarily everything. At least according to the Fed. This week, officials from the Federal Reserve Bank made it clear that in order to determine how interest rates will rise or fall, you need to look at how data is collected and measured, rather than calendar-based benchmarks.
The Fed’s pledge that interest rates will stay low for a “considerable time” could mean anything from two months to one year, Vice Chairman Stanley Fischer said today. New York Fed President William C. Dudley said this week that forecasts for an increase in mid-2015 are “reasonable.” Today, San Francisco Fed President John Williams said that timeframe is a “reasonable guess to my mind.”
Even so, he offered this caveat: “I’ve said it often enough that I should probably have a T-shirt, but let me reiterate: The decision to raise rates will be data-driven, not date-driven,” Williams said in a speech in Las Vegas.
Antivirus Maker Symantec Splitting Into Two Publicly Traded Companies
Big news this week for computer antivirus software company Symantec, which announced that it would be splitting into two publicly traded companies. One company will be dedicated to business, while the other will be dedicated exclusively to information management. They believe that diversifying in this way will allow them to expand their presence in both markets, based on what they are calling an “extensive business review.”
Symantec said Thursday that following “an extensive business review” of its strategy and structure, it has decided to create two standalone businesses in order to maximize growth and shareholder values. The security business will focus on cybersecurity services ranging from Norton antivirus software to encryption and user authentication products; during fiscal year 2014, it generated $4.2 billion in revenue.
The second company to be created from this split will focus on Symantec’s information management business — which generated $2.5 billion in fiscal 2014 — and offer services including backup and recovery, archiving and eDiscovery.
AT&T Prowling for More Latin America Deals After DirecTV
AT&T is moving fast after its recent purchase of DirecTV, and they’ve now got Latin America in their sights. The company, which made headlines with its $48.5 billion takeover of the satellite television provider, has virtually no presence in Latin America as it is. That’s all going to change, and change soon, if AT&T has their way.
The key to competing in these new markets may be offering customers not just satellite TV, but also mobile-phone service and broadband access in countries like Mexico, where less than half of homes pay for TV or Internet. AT&T needs to acquire more assets south of the border if it’s serious about spurring growth outside the U.S., said Jonathan Chaplin, an analyst with New Street Research.
“DirecTV has a great, competitive product in Latin America, but they will need broadband capabilities,” Chaplin said. DirecTV has been testing wireless Internet access, when it may make more sense to buy large landline networks that already have broadband subscribers, he said.
SEC Chief Says Major Changes are Necessary for Market Growth, Amidst Regulations
The SEC, or rather its commissioner Dan Gallagher, is making some bold statements about how markets are measured and regulated. In fact, he believes that the whole system of regulation needs to be overhauled, and updated to match current trends and technology.
Gallagher firmly believes that self-regulation, specifically in terms of the Self-Regulatory Organization (SRO) model, by which stock exchanges regulate themselves, needs to be thoroughly reviewed. The SRO model currently allows stock exchanges to self regulate, but at what cost? The SRO rules only apply to authorized exchanges. However, according to recent data, nearly 40 percent of all trading occurs in what’s known as Alternative Trading Systems (ATS).
These ATS’ are almost all unregulated, setting up a conflict of interest when trading with the previously mentioned SROs. Gallagher, and others, believe that all of these markets should be regulated under one roof. However, under the current SRO model, it’s not a likely possibility.
He insists that “the heavier regulatory burdens exchanges operate under put them at a competitive disadvantage and that it is time to examine whether all trading participants should be brought under one regulatory scheme.” Gallagher also insists that the SEC should focus more on broker-dealers, and how to get them to adhere to better execution practices, rather than solely focusing on exchanges.
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