Wall Street offers no relief to European rivals 18 Oct 2018 On average, U.S. investment banks reported a 7 percent jump in equities revenue in the third quarter, while fixed income trading declined. If results from European peers follow the same trend, top-line growth will be minimal. That leaves more cost cutting to boost dreary returns.
U.S. Treasury hasn’t yet been Trumped 17 Oct 2018 China again escaped being named a currency manipulator by the U.S. agency, despite pressure from the president. Although some trade-related penalties are already happening through other means, it’s a rational decision. Steady hands at Treasury and the Fed offer investors comfort.
SEC data-fee ruling hits exchanges where it hurts 17 Oct 2018 The U.S. securities regulator’s rejection of two increases won’t hurt NYSE and Nasdaq in the short run but it does challenge their business model. The fragmentation of equity trading has made data as valuable as execution or listings. Losing pricing power is a big risk.
Finance makes Apple and Google forced friends 17 Oct 2018 Steve Jobs once wanted to destroy Google for copying the iPhone. The company he founded is now dependent on the search engine and its parent Alphabet for around 10 pct of its profit. The growth of mobile search and the market for secondhand phones will bind the two even tighter.
Dollar Tree proves money doesn’t grow on mergers 17 Oct 2018 The $20 bln U.S. ultra-discount chain has lost a quarter of its value in nine months. That’s despite winning a fight to acquire Family Dollar in 2015 and beating merger cost-cut targets. Now activist Carl Icahn may be buying shares. Deals only buy time for struggling retailers.
Wall St seeks ambitious banker for lit new role 17 Oct 2018 Canada has legalized recreational marijuana, and other countries are likely to follow. That’s an investment-banking opportunity. Goldman Sachs and Bank of America have already dabbled in cannabis deals. It’s only a matter of time before a big firm hires its first “head of weed.”
Guest view: Climate activism nears final frontier 17 Oct 2018 Google, Planet, MethaneScan and space agencies are starting to track pollutants from orbit, giving big emitters like Coal India and PetroChina more reason to come clean. That, writes Thomson Reuters sustainability guru Tim Nixon, gives a needed boost to tackling global warming.
Hadas: Beware of the curse of financial markets 17 Oct 2018 In theory, movements in bond and stock prices have big economic effects. In practice, the ties are fairly tenuous. But the widespread belief that these minor and inaccurate indicators are valuable is enough to give them power. A bad week in the markets can do real economic harm.
Japanese banks sit quietly pretty in Saudi saga 17 Oct 2018 Top U.S. and European bank bosses have pulled out of Riyadh’s investment conference. Japanese rivals MUFG and Mizuho are relatively insulated from the same culture of protest. If anything, it’s a chance to court favour in the kingdom and increase their share of Saudi’s fee wallet.
Netflix is online video’s Walmart, and its Tiffany 16 Oct 2018 CEO Reed Hastings has created a firm that has both the scale of the giant retailer and the pricing power of the luxury jeweler. That’s rare. The trick will be ensuring his $145 bln outfit, which added more subscribers than expected last quarter, can maintain both labels.
Energy bigwigs fiddle while world burns 16 Oct 2018 The White House may nix a plan to breathe life into the coal industry. Exxon’s new support for a carbon tax could mostly hit anthracite, not its own fossil fuels. Avoiding devastating climate change requires serious commitment, not baby steps, putting yet more onus on investors.
Oil makes Saudi Arabia slippery sanctions target 16 Oct 2018 U.S. lawmakers are invoking a law used to impose Russian sanctions to demand answers about a missing journalist. There’s momentum for a similar penalty for the kingdom. But Saudi retaliation could hike oil prices - the opposite of what President Trump has been agitating for.
Uber starts IPO journey with its destination 16 Oct 2018 The cash-burning car service may be worth up to $120 bln according to bankers – nearly twice as much as a recent funding round. It’s risky to start with a big number, as Saudi Aramco found recently. Justifying it may call for imaginative views of the markets Uber can disrupt.
David Solomon has a people challenge 16 Oct 2018 Goldman Sachs’ new boss steps in at a flattering time. His investment-banking business is solid and returns are beating rival Morgan Stanley. The trading desks need work, but Solomon might also get more from Goldman’s bankers. They’re less productive than they could be.
BlackRock’s immunity to market cycles runs out 16 Oct 2018 Revenue growth slowed to a crawl as clients of the world’s largest money manager pulled large sums out of equities in favor of low-cost exchange-traded funds in the latest quarter. Tax cuts masked a 20 pct drop in performance fees. Choppy markets can rock even the biggest boats.
The Exchange: Anshu Jain 15 Oct 2018 Deutsche Bank was credited with coming through the 2008 crisis in better shape than many of its rivals. Jain, who rose from running the German lender’s global markets business to eventually become CEO, stopped by Times Square to speak with Rob Cox about the state of finance.
Lampert now at mercy of Sears, not vice versa 15 Oct 2018 The bankrupt retailer’s top owner dragged investors along for over a decade as he kept it alive against the odds. Now although he’s owed some $2.6 bln, he’s no longer in charge and he’ll have to fight with other lenders and the government’s pension guarantor for every dollar.
Cannabis is like bitcoin, only with revenue 15 Oct 2018 Stocks of producers like Tilray and Canopy have risen faster than the digital currency did, fueled by Canada’s imminent legalization. Today’s valuations make no sense and accounting is patchy. Unlike bitcoin, these pot companies have real sales – but that only fuels the frenzy.
Citi can rise above Wall Street’s bad governance 15 Oct 2018 The mega-bank was one of the first to split the chair and CEO roles in the financial crisis – and is one of the last still adhering to this best practice. It has served Citi well, augmenting the case for finding a new overseer for Mike Corbat when Mike O’Neill retires.
$34 bln U.S. defense deal covers all bases but two 15 Oct 2018 The planned combination of Harris and L3 is a real merger of more-or-less equals with little overlap and CEO succession set in advance. The U.S. government even comes off better. Yet for most stakeholders to win, someone must lose. In this case, it’s suppliers and employees.