Money‚ Markets & Macroeconomics

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.

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.

iPhones keep ringing for Taiwan’s TSMC

18 July 2019

Quarterly earnings at the $213 bln contract chipmaker fell to $2 bln, capping a dismal first half. New models from Apple should mean a better end to 2019, though. TSMC's growing heft in the market for cutting-edge semiconductors suggests smartphones can power a stable recovery.

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.

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.

New UK banknote just about passes Turing test

17 July 2019

With cash use shrinking and high denominations favoured by crooks, there are reasons to scrap big bills. But a revamp of the 50-pound note, picturing the mathematician, is intelligent enough. Unlike, say, 500 euros, it still fits a system shifting slowly to digital payments.

Auto pessimism could be over-revved in China

17 July 2019

A grim start to the year saw sales slump by more than 10%. Chaos reigned amidst new rules, while Beijing remained reluctant to offer stimulus. But policy pressure is uneven, and the worst could be past: luxury brands and electric-car makers might be the first to pep up.

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.

“Do or die” Brexit condemns sterling to new lows

16 July 2019

The pound fell to its weakest in two years against the dollar. Boris Johnson and Jeremy Hunt, rivals to be Britain’s next leader, are vying to take the hardest stance on the UK’s exit from the EU. If they stick to their guns, the currency will suffer long before the economy does.

Uber adds useful numbers to solve gender equation

15 July 2019

The ride-hailing app is tying executive compensation to targets for increasing the share of women and minorities in its ranks. Linking pay to worthy diversity goals is one concrete way for Uber to rehabilitate its toxic image. It also paves the road for others to follow.

Silicon Valley is trapped in political purgatory

15 July 2019

Facebook can shrug off a $5 bln fine over privacy but the U.S. Treasury is questioning its crypto-coin plan. It also faces, with others, an antitrust grilling in Congress. Big tech doesn’t want a Wall St-like straitjacket, but growth will suffer without clear rules of the road.

Abu Dhabi’s private equity plunge is sensible idea

15 July 2019

Hiking direct investments to the asset class by the emirate’s $700 bln sovereign wealth fund - and cutting reliance on fee-hungry buyout firms - raises risks when the economic cycle turns. But ADIA’s status as one of the more measured SWF dealmakers affords a degree of comfort.

Trump FX gripes may escalate another war of words

15 July 2019

The U.S. president says China and Europe are manipulating their currencies and Washington should match them. Competitive devaluation would break yet another long-standing norm and add a foreign-exchange battle to tariff conflicts. There would also be few, if any, winners.

China’s stimulus bazooka best left in holster

15 July 2019

Growth slowed to 6.2% year-on-year in the second quarter, down from 6.4% in the prior three months. The economy is cooling, but not cratering. A Politburo meeting expected later this month will signal how Beijing plans to respond. The best option may be to keep extra powder dry.

The Exchange: Tiananmen 3.0

15 July 2019

Han Dongfang was expelled from China for organising worker protests that were bloodily suppressed in 1989. He founded China Labour Bulletin, which tracks factory protests, strikes and policy. He speaks with Pete Sweeney about the economic stress on workers and college graduates.

Review: The struggle of Russia’s crony capitalists

12 July 2019

Anders Aslund’s new book explains how President Vladimir Putin’s old friends and colleagues grabbed control of Russia’s economic system. He’s hazier on what might happen next. The economy looks stable but who owns what may change. Oligarchs cannot afford to rest on their laurels.

Singapore is an imperfect global barometer

12 July 2019

The Lion City grew 0.1% in the second quarter, the slowest pace in a decade. It’s a perturbing signal from the first big open economy to report, and a sharp contraction in manufacturing will worry other tech exporters. But the volatile numbers can set off false alarms elsewhere.

Old buyouts surf software’s frothy wave

11 July 2019

McAfee may return to public markets three years after TPG bought it from chipmaker Intel. Private equity ownership and M&A have buffed the firm up, even as PC anti-virus software has matured. But the idea McAfee’s value has doubled also rests on voracious demand for tech stocks.