(Evening Standard)
Wall Street stands to make billions in profits
09:20, Simon English
The Wall Street banking giants opened their latest earnings season today. The figures are likely to starkly illustrate the gap between the current status of New York and London as financial centers.
They are expected to report billions in profits, which are likely to be reflected in high tax revenues for the US government and tasty bonuses for New York bankers.
JP Morgan is expected to report record third-quarter profit of $4 per share, or $11.5 billion, on revenue of nearly $40 billion.
JPM, led by Jamie Dimon, perhaps the world’s most powerful banker, has been a leading voice in bringing bankers back to the office.
Citigroup, led by Britain’s Jane Fraser, the first woman to head a major U.S. bank, is likely to post equally stellar returns of perhaps $2.5 billion in profits.
This shines a harsh light on the British banks that have missed out on major IPOs and whose lack of activity is putting jobs in the City at serious risk.
One trader complained that given the outbreak of fighting in Israel this week, the only bankers employed were the oil division.
Read more here
St James’s Place falls 10% and Ashmore falls 6%, FTSE 100 remains stable
08:42, Graeme Evans
Shares in St. James’s Place fell 10% after the Financial Times reported that the company is under pressure from regulators to overhaul its fee structure.
The UK’s largest asset manager, which today said it was continuing to work on a review of its fee model, fell 78p to 740.6p and Hargreaves Lansdown lost 31.6p to 737.8p.
The FTSE 100 index held steady, rising 6.96 points to 7651.74, as investors continued their flight into energy stocks following this week’s rise in oil prices.
BP shares rose 2%, or 9.7p, to 545.8p and are up 5% for the week as investors also welcomed details of a strategy briefing held in Denver on Wednesday.
The FTSE 250 index fell 49.03 points to 17,786.66, with emerging markets fund manager Ashmore down 6%, or 11.3p, to 173.3p after its latest trading update.
The story goes on
Assets under management fell $4.2 billion in the quarter ended Sept. 30, reflecting negative investment performance of $1.3 billion and net outflows of $2.9 billion.
Lounge Chairs Open Record Number of Locations as Demand Rises Again
07:57, Simon Hunt
Bar and restaurant group Loungers is preparing for a record number of new site openings as it welcomes a recovery in demand.
The company said it opened 16 new venues in the six months to October and planned a further 17 within the next six months, creating 1,000 new jobs.
Recliners reported 7.7% year-over-year sales growth in the period and 25% compared to pre-pandemic levels.
Nick Collins, CEO, said: “I am pleased with our strong trading performance across both the mature estate and our new openings. With a strong pipeline of new openings ahead of us, I have never been more optimistic about our prospects.”
Shares in Loungers rose 4% to 195p.
(Lay)
CMA approves merger with Microsoft Activision
07:26, Simon Hunt
Microsoft’s long-running battle with the Competition and Markets Authority finally came to an end today as the regulator announced it would approve its blockbuster merger with Call of Duty maker Activision.
The CMA rejected an earlier merger proposal from Microsoft, citing concerns about competition in the cloud gaming market. Microsoft then brought a new deal to the table that would see Activision’s cloud gaming managed by a third party, Ubisoft.
The CMA said of the revised proposal: “The new deal will prevent Microsoft from blocking competition in cloud gaming as this market is booming, and maintain competitive prices and services for UK cloud gaming customers.”
“It will enable Ubisoft to offer Activision’s content across any business model, including through multigame subscription services. It will also help ensure that cloud gaming providers can use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.”
Activision said: “The CMA’s official approval is great news for our future with Microsoft and we look forward to joining the Xbox team.”
Read more here
Activision developed the popular Call Of Duty games (Tim Ireland/PA) (PA Archive)
Markets in Asia are weakening, US banking results are in focus
07:20, Graeme Evans
Quarterly results from banking giants JPMorgan Chase, Citi and Wells Fargo will provide insight into the health of the US economy today.
Their updates come as investors remain nervous about the outlook for interest rates after yesterday’s inflation rate of 3.7% came in slightly higher than expected.
The S&P 500 index and the Nasdaq Composite closed down 0.6% last night, although futures markets later point to a steady start.
The FTSE 100 index was the strongest of the leading European benchmarks in yesterday’s session, rising 0.3% to 7645 thanks to support from oil giant BP.
The top flight is expected to open slightly lower this morning after China’s latest inflation and trade data showed the economy continues to struggle for momentum.
Hong Kong’s Hang Seng index erased yesterday’s sharp rise with a fall of more than 2%, while the Nikkei 225 also moved into negative territory.
Review: Yesterday’s top stories
Thursday October 12, 2023, 9:46 p.m., Simon Hunt
Good morning from the Evening Standard city desk.
Rishi Sunak’s promise to halve inflation is now in jeopardy. That’s the view of former Standard City editor Chris Blackhurst, who wrote in yesterday’s paper that an escalation of the conflict in Israel could disrupt the flow of global oil, thereby driving up energy prices sharply.
The IMF fears Britain is not well equipped to fend off persistently high inflation. The US and Eurozone countries are all in stronger shape. Why? Unfortunately for Sunak, it is Britain’s dependence on global energy prices – the very prices that are now likely to rise due to the Israel-Hamas war.
Read more here
Here’s a roundup of our top headlines from yesterday:
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