United States of America

Wall Street bonuses hit by misplaced optimism

19 July 2019

All the major U.S. banks posted a drop in trading and corporate finance revenue this year, with Morgan Stanley suffering most. That's already putting a dent in employees' generous pay packages. A poorly timed hiring spree is exacerbating it, especially at JPMorgan and Jefferies.

BlackRock margin pinch is chilling sign for peers

19 July 2019

Earnings fell 7% at the world’s largest fund manager even as it pulled in a massive $151 bln of new money. Investors shifting to bonds, cheap index funds and ETFs are to blame. Larry Fink’s firm has the breadth and size to cope; others like T. Rowe Price may not be so fortunate.

Boeing’s 737 disruption is still not maxed out

18 July 2019

The aerospace giant is owning up to nearly $7 bln in charges and increased costs over the grounding of its troubled MAX jet. The tally is bound to grow, and a return to service in the fourth quarter is far from guaranteed. Airlines and investors should brace for more turbulence.

Viewsroom: AB InBev’s stubborn financial beer gut

18 July 2019

The $150 bln brewer of suds like Budweiser and Stella has scrapped its Asia unit’s Hong Kong float. CEO Carlos Brito now needs new ways to reduce the company’s debt. And as the second pulled IPO in weeks amid civil unrest, it puts the city’s financial hub under a spotlight.

Aging app kerfuffle shows fun trumps privacy

18 July 2019

Consumers love FaceApp’s filter for making selfies look older or sexier. Its Russian ownership has suddenly sparked privacy worries. Yet the app isn’t new, and people have been posting their images on social media for years. It’s past time for regulators to set some boundaries.

Banks send investors on Tradeweb treasure hunt

18 July 2019

The IPO of the $11 bln trading-tech firm created small windfalls for backers including Morgan Stanley, Citi and Goldman Sachs, but they reported the sums differently and with mixed levels of clarity. It’s the latest example of how shareholders are forced to be accounting sleuths.

Bill Ackman finds activist attention unappealing

18 July 2019

The hedge fund boss’s $4 bln London-listed fund has incurred investor wrath over its low price and a bond issue. The prescription is activism 101: buy back stock and shake up the board. Ackman, for once a target, may find new sympathy for the defence that he just needs more time.

Blackstone’s redesign takes quick shape

18 July 2019

Even as quarterly investment income fell, the buyout shop grew assets by $45 bln and fee-based earnings jumped 24%. More fund managers can now buy into Blackstone, and they seem to prize this steadier income. There will be ebbs, but early signs bode well for the new structure.

Morgan Stanley’s Gorman marks a middling decade

18 July 2019

Since being named CEO in 2009, James Gorman has made Morgan Stanley a big name in wealth management. That mutes the impact of trading, which a weak second-quarter performance shows is a good thing. Shareholder returns are only so-so – but at least beat rival Goldman Sachs.

Netflix runs into an age-old Hollywood problem

17 July 2019

The $159 bln video-streaming service added fewer subscribers than forecast. A price hike played a part, but Netflix also blamed a less appealing line-up of shows. Predicting hits and flops has long flummoxed Tinseltown. The ensuing lumpy results are now in Netflix’s script, too.

Congress is all bark and no bite on Big Tech

17 July 2019

U.S. lawmakers failed to disrupt Silicon Valley executives in hearings about antitrust concerns and Facebook’s crypto coin. Amazon faced some heat about third-party sellers but queries about MySpace and iCloud ads were distractions. It provides little incentive to change.

American depositors do the heavy lifting

17 July 2019

Bank of America followed JPMorgan and other peers with solid consumer banking results that propped up weak trading and investment banking. Falling rates and rising competition are risks, but it helps that Main Street customers generally can’t or don’t push hard for better deals.

Hadas: Peaceful trade theory ominously unravels

17 July 2019

From 18th century enthusiasm for “doux commerce” to the WTO, optimists have considered trade a good antidote to combat. From the Opium Wars to Trump’s tariffs, reality has been much more conflictual. The latest round of globalisation isn’t quite dead, but is badly wounded.

EU Amazon case pushes tech towards utility status

17 July 2019

Antitrust tsar Margrethe Vestager may probe the $990 billion group’s use of merchants’ data. That would fit with a wider European drive to stop technology companies’ platforms from favouring their own services. Tighter rules will, however, cement bigger players’ dominance.

China’s Topsports takes eye off e-commerce ball

17 July 2019

Two years after a $6.8 bln buyout of Belle, the shoe retailer has unveiled IPO plans for its athletic-wear chain. A Beijing-backed fitness push should help sustain sales growth. A dependence on Nike and Adidas is a worry, though, as is the lack of emphasis on its online strategy.

Amazon’s data deal invites D.C. scrutiny

16 July 2019

As its executives appeared at an antitrust hearing in Congress, the e-commerce giant offered customers $10 to track their web browsing. It’s a smart way to grab business from rivals, and the price low-balls the value of user data. It’s also a demonstration of how dominance works.

2017’s worst IPO tries on some 2019 flavoring

16 July 2019

Blue Apron’s battered shares rose over 50% after it agreed to put Beyond Meat’s plant-based burgers on its meal-kit menus. Other firms have juiced their stock with cannabis or crypto ventures, but the effect usually fades. This one promises a similarly disappointing aftertaste.

Tech and NYC are so over the Amazon spat

16 July 2019

With Google and WeWork expanding, Manhattan office rents are setting records and the space being leased is at a 25-year high. Tech employment continues to grow, and even Amazon may be seeking more capacity. It suggests the city can do just fine without subsidizing big tenants.

Wells Fargo waves carrot at wavering CEO wannabes

16 July 2019

The U.S. lender’s second-quarter earnings could aid its search for a new boss. One-off gains helped, but cost cuts kicked in too. Getting expenses to JPMorgan’s level and mending regulatory relations could boost Wells Fargo’s value by a third. That’s hard to replicate elsewhere.

Goldman enlivened by condition it wants to cure

16 July 2019

The $77 bln Wall Street firm’s decent second quarter relied on gains from private-equity investments and equities traders who performed much better than some rivals. Boss David Solomon wants over time to downplay those volatile businesses. For now he’s probably glad he didn’t.