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Rising interest rates roiled markets last year and global investment banking revenue sank more than 50% from a year-earlier quarter, according to data from analytics firm Dealogic. SHARPLY LOWERAcross the board, investment banking fees were sharply lower. Morgan Stanley's revenue from investment banking business fell 49% in the fourth quarter while Goldman Sachs's investment banking fees fell 48%. JPMorgan's investment banking unit saw its revenue down 57%, Citigroup Inc's (C.N) investment banking revenue plunged 58% while Bank of America Corp (BAC.N) investment banking fees more than halved. Strength in trading helped offset a slump in investment banking, while interest rate hikes by the U.S. Federal Reserve helped income.

☆ Big U.S. banks continue to add jobs as Goldman Sachs cuts staff
▼ + stars: | 2023-01-14 | by ( ) www.cnbc.com time to read: +3 min

The chief financial officers of the two biggest U.S. banks said they would hire selectively despite waning economic growth. JPMorgan's Chief Financial Officer Jeremy Barnum said the bank is still hiring and "in growth mode" in a call with journalists to discuss the bank's fourth-quarter earnings. Bank of America also continues to hire, particularly in wealth management, while also remaining disciplined on its expenses, Chief Financial Officer Alastair Borthwick told reporters on Friday. Citigroup Inc's Chief Financial Officer Mark Mason told an earnings briefing "we're actively hiring to execute against our strategy. The banking giants stood by their hiring plans even as other lenders cut staffing in investment banking and mortgages.

☆ Futures subdued as focus shifts to results from big U.S. banks
▼ + stars: | 2023-01-13 | by ( ) www.reuters.com time to read: +2 min

With the Federal Reserve's aggressive tightening campaign to combat inflation, higher borrowing costs have prompted consumers and businesses to curb their spending, impacting banks' profits as demand for credit slows. "Bank earnings are going to be a big test," said Michael Hewson, chief market analyst at CMC Markets UK. "It will be interesting to see whether they (banks) have made any further provisions for non-performing loans, how they see demand for loans." Delta Air Lines Inc (DAL.N), BlackRock Inc (BLK.N) and UnitedHealth Group Inc (UNH.N) are also scheduled to report fourth-quarter earnings on Friday. ET, Dow e-minis were up 10 points, or 0.03%, S&P 500 e-minis were down 0.5 points, or 0.01%, and Nasdaq 100 e-minis were down 16.5 points, or 0.14%.

☆ BofA profit beats estimates as higher rates bolster interest income
▼ + stars: | 2023-01-13 | by ( ) www.reuters.com time to read: +2 min

Jan 13 (Reuters) - Bank of America Corp (BAC.N) reported a bigger-than-expected fourth-quarter profit on Friday, helped by a surge in net interest income as the U.S. Federal Reserve raised rates through most of last year. Bank of America's net interest income (NII) — a metric that measures the difference between the interest earned on loans and paid out on deposits — surged 29% to $14.7 billion in the quarter. Its profit applicable to common shareholders rose 2% to $6.9 billion, or 85 cents per share. The bank added $403 million to its net reserve build. That compares with a net reserve release of $851 million a year ago.

[1/4] A Bank of America logo is pictured in the Manhattan borough of New York City, New York, U.S., January 30, 2019. The chief financial officers of the two biggest U.S. banks said they would hire selectively despite waning economic growth. JPMorgan's (JPM.N) Chief Financial Officer Jeremy Barnum said the bank is still hiring and "in growth mode" in a call with journalists to discuss the bank's fourth-quarter earnings. Bank of America (BAC.N) also continues to hire, particularly in wealth management, while also remaining disciplined on its expenses, Chief Financial Officer Alastair Borthwick told reporters on Friday. The banking giants stood by their hiring plans even as other lenders cut staffing in investment banking and mortgages.

JPMorgan Chase & Co (JPM.N) fell 1.2% as it set aside $1.4 billion in anticipation of a mild recession, even after beating quarterly profit estimates. The bank's Chief Executive Jamie Dimon listed a number of uncertainties facing the economy including geopolitical tensions and sticky inflation. Bank of America Corp (BAC.N) reported better-than-expected profit, with CEO Brian Moynihan also acknowledging an "increasingly slowing economic environment". Wells Fargo & Co (WFC.N) and Citigroup Inc (C.N) fell short of quarterly profit estimates, sending their shares down 3.9% and 0.6% respectively. Keeping the pressure off the Dow Jones, UnitedHealth Group Inc (UNH.N) rose 1.9% after beating Wall Street expectations for fourth-quarter profit.

☆ Brian Moynihan says Bank of America expects 'mild recession' and is preparing for worse
▼ + stars: | 2023-01-13 | by ( Jesse Pound | ) www.cnbc.com time to read: +1 min

Brian Moynihan, chief executive officer of Bank of America Corp., during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, D.C., on Thursday, Sept. 22, 2022. Bank of America CEO Brian Moynihan said Friday that the bank is preparing for a potential recession in 2023, including a scenario where unemployment rises rapidly. "Our baseline scenario contemplates a mild recession. The CEO's statement mirrors the earnings report for JPMorgan Chase, whose economic outlook calls for "a mild recession in the central case." Shares of Bank of America were down less than 1% on Friday.

☆ Wall Street banks stockpile funds for possible recession, show resilience
▼ + stars: | 2023-01-13 | by ( ) www.reuters.com time to read: +4 min

REUTERS/Jeenah Moon/File Photo/File PhotoNEW YORK, Jan 13 (Reuters) - Wall Street's biggest banks stockpiled more rainy-day funds to prepare for a possible recession ahead and reported weak investment banking results, but said consumers remained healthy and higher rates boosted profits. Strength in trading helped offset a slump in investment banking, while interest rate hikes by the U.S. Federal Reserve helped income. However, Citigroup Inc (C.N) reported a 21% fall in profits with investment banking taking a hit. Global investment banking revenue sank to $15.3 billion in the fourth quarter, down more than 50% from a year-earlier quarter, according to data from Dealogic. Bank of America's investment banking fees more than halved in the quarter.

"With most U.S. economists forecasting either a recession or significant slowdown this year, banks will likely incorporate a more severe economic outlook," said Morgan Stanley analysts led by Betsy Graseck in a note. Rising prices and higher borrowing costs have prompted consumers and businesses to curb their spending, and since banks serve as economic middlemen, their profits decline when activity slows. Reuters GraphicsStill, lenders stand to gain from rising rates that allow them to earn more from the interest they charge borrowers. Morgan Stanley and Citigroup, among others, have also cut jobs after a plunge in investment-banking activity. Analysts will also watch if banks such as Morgan Stanley and Bank of America book any writedowns on the $13-billion loan to fund Elon Musk's purchase of Twitter.

☆ CES technology trade show adopts social theme
▼ + stars: | 2023-01-07 | by ( Dawn Chmielewski | ) www.reuters.com time to read: +2 min

Las Vegas, Jan 6 (Reuters) - Farm equipment took the keynote spotlight at the CES technology trade show in Las Vegas, as "human security for all" became the first theme in its 56-year history. "Technology allows farmers to create more with less," May told an audience of 2,000 at one of the world's largest tech events, organized by the Consumer Technology Association (CTA). The trade group is partnering with the World Academy of Art and Science and the United Nations Trust Fund for Human Security to encourage the tech industry to help tackle the world's most pressing problems. The CES sessions are the first phase of the trade group's "rolling thunder" campaign to raise awareness across all sectors of the economy, said Garry Jacobs, executive chairman of the Human Security For All campaign. Reporting by Dawn Chmielewski in Las Vegas; Editing by Richard ChangOur Standards: The Thomson Reuters Trust Principles.

Companies are increasingly working together to cut greenhouse-gas emissions but such collaboration faces the threat of antitrust action demanded by politicians who say it violates competition rules. There are now more than 150 business climate collaborations, according to research by Harvard Business Review. “There are a lot of ways to stay on the right side of antitrust laws,” says Justin Stewart-Teitelbaum, antitrust partner at Freshfields. Traditionally, in most jurisdictions, antitrust officials weigh whether the benefits of cooperation outweigh any economic harm caused by it. The anti-ESG movement in the U.S. bases its antitrust threats partly on an assertion that climate action provides little societal benefit to outweigh any economic harm of cooperation.

Dec 22 (Reuters) - Scott Minerd, global chief investment officer at investment and advisory firm Guggenheim Partners and a prominent Wall Street bond investor, has died, his firm said on Thursday. During his 25-year stint with Guggenheim, Minerd became a prolific commentator on financial markets and was often quoted by the media. He will be greatly missed by all," Mark Walter, chief executive and a founder of Guggenheim Partners, said in the firm's statement. Guggenheim said it had implemented a succession plan, with Anne Walsh, managing partner and CIO of Guggenheim Partners Investment Management, assuming many of Minerd's responsibilities on an interim basis. Minerd was regarded in the past few years as one of the U.S. "bond kings," along with Jeffrey Gundlach, chief executive of DoubleLine, and Dan Ivascyn, chief investment officer of bond giant PIMCO.

Last year, the industry handed out the biggest awards since 2006 as the economy roared back from the pandemic. It's a head-spinning reversal for dealmakers who racked up record profits for their firms last year and clinched eye-watering payouts for themselves. Compensation for FICC traders will probably rise slightly or stay flat, said Bell at Sheffield Haworth, while stock traders could see a small drop. Worsening economic conditions have already prompted firms including Morgan Stanley (MS.N) and Citigroup Inc (C.N), to trim their workforces. In the United Kingdom, most big firms are discussing and allocating bonuses now, with decisions not usually announced until early next year.

☆ U.S. business equipment borrowings rise 9% in November - report
▼ + stars: | 2022-12-20 | by ( ) www.reuters.com time to read: +1 min

Dec 20 (Reuters) - U.S. companies borrowed 9% more to finance their equipment investments in November from a year earlier, industry body Equipment Leasing and Finance Association (ELFA) said on Tuesday. "Labor markets are stable, inflation woes appear to be abating, consumers are spending, and businesses continue to expand and grow: a recipe for stable growth by providers of equipment financing," Petta added. ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 77.7%, slightly above the October level. The Washington-based body's leasing and finance index measures the volume of commercial equipment financed in the United States. ELFA's non-profit affiliate, Equipment Leasing & Finance Foundation, said the confidence index in December stood at 45.9, compared with 43.7 in November.

☆ Krispy Kreme Outlines Plans to Automate Doughnut Production, Reduce Debt
▼ + stars: | 2022-12-16 | by ( Kristin Broughton | ) www.wsj.com time to read: +4 min

Krispy Kreme Inc. is laying out a plan to cut debt, boost revenue and improve profitability, nearly a year and a half after its return to the public markets. Josh Charlesworth, CFO of Krispy Kreme. Krispy Kreme expects to generate $2.15 billion in revenue by the end of the 2026 fiscal year, up 41% from its projected revenue this year, including by expanding to new markets. “There’s a lot of manual intervention behind the scenes,” said Mr. Charlesworth, who also serves as global president and chief operating officer, discussing doughnut production. “We’re in pretty good shape on that score, thanks to locking in rates before the recent increases,” Mr. Charlesworth said.

☆ Fed Rate Increases Upended Funding Markets in 2022. Here’s What CFOs Can Expect in 2023.
▼ + stars: | 2022-12-14 | by ( Nina Trentmann | ) www.wsj.com time to read: +9 min

Here’s a look at how different financing instruments fared in 2022 and what’s ahead for 2023. Activity in the convertible debt market has picked up in recent weeks. Still, there could be financing opportunities for deals in 2023 in the form of syndicated loans, bankers said. “CFOs have to be aware of that and focus on cash conversion and margins,” he said, pointing to the increase in financing costs. “We expect deals will continue to get done,” he said, adding that those could however come with more oversight from lenders.

Banks still have to mark the loan to its market value on their books and set aside funds for losses that are reported in quarterly results. The deliberations of how some of these banks are thinking about accounting for these losses have not been previously reported. Three banking industry sources said the remaining $3 billion, which is unsecured, could lead to steeper losses for the seven Twitter banks. Some market participants expect the losses from the debt to be significant unless market conditions improve. Some $35 billion to $40 billion of such loans are stuck on banks' books, according to two fixed income bankers.

Bonus payout discussions are currently underway at Morgan Stanley globally, they said. Morgan Stanley, which does not disclose details of bonus payouts, declined to comment. Wall Street investment bankers can expect much smaller bonuses this year as the economy slows, according to projections published last month by Johnson Associates Inc, a compensation consultant in New York. This year's bonus discussions are taking place after Morgan Stanley CEO James Gorman said earlier this month that the bank was making "modest job cuts" worldwide. Morgan Stanley reported a 30% slump in third-quarter profit in October, missing analysts' estimate as a slowdown in global dealmaking hurt its investment banking business.

☆ Musk's bankers mull new Tesla margin loans to slash Twitter debt - Bloomberg News
▼ + stars: | 2022-12-08 | by ( ) www.reuters.com time to read: +1 min

Dec 7 (Reuters) - Billionaire Elon Musk's bankers are considering providing the Tesla Inc (TSLA.O) Chief Executive Officer with new margin loans backed by the U.S. automaker's stock to replace some of the high interest debt on his Twitter deal, Bloomberg News reported on Wednesday. The margin loans are one of the options that the Morgan Stanley (MS.N)-led bank group and Musk's advisers have discussed to ease the $13 billion debt Twitter took on as part of Musk's $44 billion deal, the report said, citing people with knowledge of the matter. Morgan Stanley (MS.N), Bank of America Corp (BAC.N), Barclays Plc (BARC.L) and Mitsubishi UFJ Financial Group Inc (8306.T) led the $13 billion financing for the bid by Musk. The banks are not expected to offload any of the Twitter debt to institutional investors until the new year, Bloomberg reported. Reuters reported in October that banks had abandoned plans to sell the debt to investors because of uncertainty around Twitter's fortunes and losses.

☆ S&P, Nasdaq extend losing streaks amid rising recession worries
▼ + stars: | 2022-12-07 | by ( David French | ) www.reuters.com time to read: +5 min

[1/2] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 29, 2022. For the benchmark S&P 500 (.SPX), it was the fifth straight session that it has declined, while the Nasdaq (.IXIC) finished down for the fourth time in a row. The S&P 500 (.SPX) lost 7.34 points, or 0.19%, to close at 3,933.92 and the Nasdaq Composite (.IXIC) dropped 56.34 points, or 0.51%, to finish at 10,958.55. The S&P 500 is on track to snap a three-year winning streak. The S&P 500 posted seven new 52-week highs and seven new lows; the Nasdaq Composite recorded 61 new highs and 307 new lows.

The benchmark S&P 500 (.SPX) fell for the fifth straight session on Wednesday. The Nasdaq (.IXIC) was down for the fourth straight session, dragged lower by a 1.3% drop in Apple Inc (AAPL.O) on Morgan Stanley's iPhone shipment target cut and a 3.9% fall in Tesla Inc (.IXIC) over production loss worries. The CBOE volatility index (.VIX), also known as Wall Street's fear gauge, rose to a two-week high to 23.01 points. The S&P 500 is on track to snap a three-year winning streak, down 17.4% so far in 2022. The S&P index recorded six new 52-week highs and seven new lows, while the Nasdaq recorded 36 new highs and 226 new lows.

[1/2] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 29, 2022. "From the bigger picture, the Fed has hiked rates to a point where markets are expecting monetary policy to be restrictive enough to cause a mild recession." The CBOE volatility index (.VIX), also known as Wall Street's fear gauge, rose to a two-week high at 23.01 points amid increased investor anxiety. Tesla Inc (TSLA.O) slumped 2.9%, down for a third straight session over production loss worries at its Shanghai plant. The S&P index recorded two new 52-week highs and six new lows, while the Nasdaq recorded 25 new highs and 149 new lows.

SummarySummary Companies Apple down, Morgan Stanley cuts Dec shipment estimateCarvana tumbles, Wedbush slashes PT to Street lowFutures down: Dow 0.25%, S&P 0.48%, Nasdaq 0.82%Dec 7 (Reuters) - U.S. stock indexes were set to open lower on Wednesday after warnings of a looming recession from major Wall Street bankers offset optimism around China relaxing its strict zero-COVID rules. Fears of a recession due to the U.S. Federal Reserve's aggressive rate hikes to curb inflation pulled the S&P 500 (.SPX) lower for a fourth straight session on Tuesday, with all major Wall Street indexes ending down 1%-2%. "From the bigger picture, the Fed has hiked rates to a point where markets are expecting monetary policy to be restrictive enough to cause a mild recession." The CBOE volatility index (.VIX), also known as Wall Street's fear gauge, rose to a two-week high at 23.01 points amid increased investor anxiety. ET, Dow e-minis were down 85 points, or 0.25%, S&P 500 e-minis were down 19 points, or 0.48%, and Nasdaq 100 e-minis were down 94.75 points, or 0.82%.

☆ Futures fall on growing fears of recession
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +3 min

SummarySummary Companies Futures down: Dow 0.11%, S&P 0.21%, Nasdaq 0.30%Dec 7 (Reuters) - U.S. stock index futures edged lower on Wednesday after warnings of a looming recession from major Wall Street bankers offset optimism around the easing of China's strict zero-COVID rules. Fears of a recession due to the U.S. Federal Reserve's aggressive rate hikes to curb inflation pulled the S&P 500 (.SPX) lower for a fourth straight session on Tuesday, with all major Wall Street indexes closing down 1-2%. ET, Dow e-minis were down 36 points, or 0.11%, S&P 500 e-minis were down 8.25 points, or 0.21%, and Nasdaq 100 e-minis were down 34.75 points, or 0.3%. Among other stocks, GameStop Corp (GME.N) jumped 1.1% ahead of its third-quarter results where it is expected to report a 4.5% rise in revenue. Reporting by Shubham Batra and Ankika Biswas in Bengaluru; Editing by Anil D'SilvaOur Standards: The Thomson Reuters Trust Principles.

☆ S&P posts 4th straight decline as recession talk weighs on Wall Street
▼ + stars: | 2022-12-06 | by ( David French | ) www.reuters.com time to read: +4 min

[1/2] The Wall Street entrance to the New York Stock Exchange (NYSE) is seen in New York City, U.S., November 15, 2022. However, technology names generally suffered as investors applied caution toward high-growth companies whose performance would be sluggish in a challenging economy. Most of the 11 major S&P sectors declined, with energy and communications services (.SPLRCL) joining technology (.SPLRCT) as leading laggards. Future economic growth prospects were in focus on Tuesday following comments from financial titans pointing toward uncertain times ahead. The S&P 500 posted three new 52-week highs and nine new lows; the Nasdaq Composite recorded 52 new highs and 262 new lows.

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