Simone Foxman

France’s Société Generale and Dutch ING Groep today both attempted to prove to investors that they were on the path to a new banking model, following their UK- and US-based peers in focusing on the boring side of banking. Looking to hold more deposits, seek out more customers, and expand their retail businesses, the banks cited visions of the future that sound a lot like Barclays’ and Morgan Stanley’s plans.

Barclays announced the details of a new business strategy today, with plans to slash 3,700 jobs in its Corporate & Investment Banking and Europe Retail & Business Banking divisions. After a year of turmoil, with three headline scandals and a shake-up of the bank’s top brass, CEO Antony Jenkins is attempting to lead an increased focus on ethics and an exit from businesses it no longer sees as profitable.

You kill Osama bin Laden. You’re a hero. But you’re also left with…nothing? An Esquire article by Phil Bronstein published today describes the difficulty the guy who evidently shot the bullets that killed Osama bin Laden is having in adjusting to civilian life. After 16 years in the Navy’s most elite unit, the Navy SEALs, a man identified as “The Shooter” left the military, having accomplished what he felt was his life’s purpose. Bronstein writes:

The European Central Bank (ECB) is keeping interest rates unchanged at 0.75%, it announced just now. While expected, this goes against the better judgment of most Keynesian economists. Not only does the move effectively strengthen the euro against its peers, making exports pricier. But it also counteracts the credit pressures still plaguing the euro zone right now, particularly in peripheral banks. The ECB is pretty much refusing to do anything more to allay the euro zone’s economic pain.

As Western economies struggle to return to growth, Asian countries that used to depend on trade with Europe and the US are turning to the rest of Asia instead. The forthcoming ASEAN Regional Comprehensive Economic Partnership (RCEP) would essentially link the up-and-coming Asian producers of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) to the region’s consumers, the more developed economies of Australia, China, India, Japan, New Zealand and South Korea. Negotiations about the single market are set to start in April, with plans for putting trade partnerships in place in 2015.

The Royal Bank of Scotland announced this morning that it would pay a total of $612 million in fines to the UK Financial Services Authority, the US Commodities Futures Trading Commission, and the US Department of Justice for its role in manipulating the London Interbank Offered Rate (Libor), one of the world’s most important financial benchmarks.

Dell has agreed to go private in a deal led by its founder and investment firm Silver Lake for $13.65 per share, which works out to $24.4 billion in total, the largest leveraged buyout since the financial crisis.

Staggering 4.5% and 3.8% falls in Spanish and Italian markets today (not to mention 3.0% and 2.5% drops in the French and German indices, respectively) suggest renewed scrutiny of Europe and the markets’ recognition that little has really changed since the euro-zone crisis flared up in late 2011.

2012 wasn’t a good year for Barclays. Thrust into the spotlight over a scandal about rigging the world’s most important financial benchmark—the London Interbank Offered Rate (Libor)—the bank lost three of its top people, including its chief executive and darling of the London financial world, Bob Diamond.

What to watch for today

Also read our counter-argument: Why Facebook will never make a significant profit

The Bureau of Labor Statistics reported this morning that US personal income rose 2.6% in December—a sharp uptick from previous months. The figure caps off a yearlong trend of rising incomes suggesting that American wallets are padded with increasing quantities of cash. That could fuel more consumer spending, which in turn would cause businesses to produce more, followed by their hiring more workers, driving up incomes even more—you get the idea.

Shares of Saipem, the Italian energy engineering firm controlled by Eni, fell 34.29% in trading Jan. 30 after the company slashed earnings estimates and its financial outlook in a warning to investors ahead of its mid-February earnings. The difference between analyst estimates and Saipem’s revised outlook was massive: the company expects to earn €750 million ($1.02 billion) in 2013, about half of what analysts were expecting for the year. The shock sent waves through other companies in the energy market: Saipem’s biggest competitor, the UK-based Petrofrac, saw its shares fall by 6.91% during trading, John Wood Group fell 2.19%, and shares of Amec fell 2.09%.

UPDATE: 9:04 AM EST

What to watch for today

You’d think that a bank that has survived for more than 600 years would be a little more cautious than most. Indeed, Banca Monte dei Paschi di Siena (MPS), Italy’s third-largest bank and the world’s oldest, has a conservative reputation. But for the past few days financial headlines in Italy have been dominated by a derivatives-trading scandal more reminiscent of Wall Street than the Via Banchi di Sopra.

You can bet on continued rapid growth in the smartphone market. But ongoing unbridled profitability for its biggest players such as Apple and Samsung? That’s less of a sure thing.

For the last few years, company stocks have had a propensity to “correlate”, i.e., all move together. Individual firms’ fundamentals have been obscured by broad market moves in response to Federal Reserve announcements, panic about the euro, or data about the extent of China’s slowdown. This environment is often hard on investors who pick individual stocks instead of betting on indices, because the extra effort they spend on identifying the best-run companies doesn’t pay off, or can even be counter-productive. For instance, while the S&P 500 rose 13% in 2012, hedge funds, on average, gained just 6.2%.

Durable goods orders, excluding transportation, grew by 1.3% in December, suggesting that the US economy kept plugging along through debates in Washington, DC, about how to resolve the fiscal cliff—a package of austerity measures that could have slashed government spending and inflated taxes at the beginning of 2013.

This article has been corrected.

Exxon briefly overtook Apple as the world’s largest publicly traded company in the middle of trading today, almost exactly a year after it lost the crown. But Apple, which was hit after its earning report on Wednesday disappointed investors, has narrowly regained the title in afternoon trading.

The euro is rallying today to its strongest value in a year. It’s just the start of a trend for a currency that’s likely to appreciate over the coming months, as the US Federal Reserve and the Bank of Japan continue down the road of ultra-easy monetary policy. And that’s problematic for efforts to get euro zone economies back on track, as a stronger euro makes European goods and services more expensive for foreign buyers.

Update (7.53pm ET): Samsung has posted fourth-quarter results (pdf), showing an 89% increase in operating profit year-on-year for the quarter and 76% in net profit, ahead of analysts’ estimates. It also said that, contrary to expectations, it won’t cut capital spending this year (though it won’t increase it either, as it has for most of the last eight years.) That contrasts with Apple’s results yesterday, which disappointed the market and caused its stock to plunge.

Yesterday, Netflix revealed that activist investor Carl Icahn bought a 10% stake in the company in late October. News of his investment (he had to file a 13F at the time) sent shares of NFLX up 14%, but they soon fell back to $60.12 later in the month before rallying to end the year. By yesterday at market close, Icahn had made a tidy sum on the company—$252 million, in fact.