WSJ City: Barclays Profit Hit by Asset Sales; UBS Profit Slips; BOJ Disappoints

Good morning from London. Here's essential reading today from WSJ City

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MUST READS FROM WSJ CITY

Barclays' first half profit fell nearly a third as it boosted reserves and tried to speed up downsizing.

UBS said quarterly profit fell amid turbulent markets. But the Swiss bank handily beat forecasts.

The BOJ stopped short of more aggressive stimulus measures, sending the yen higher.

City Talk: Buy the BOJ-induced Bund dip, ArcelorMittal beats views, UBS gets a Brexit boost.

In its battle to keep financial institutions in London, Britain has an overlooked ally: English law.

Google parent Alphabet jumped after hours, as profits beat expectations on strong ad demand.

Amazon turned in another record profit, helped by strong sales at its cloud computing unit.

A former Goldman executive sued the firm related to a probe into the theft of Fed secrets.

There's something dangerous at work in the markets: Investors are taking huge risks with long bonds.

The EU said it will review bonus rules that small banks and investment firms say have proven too costly.

As Saudi Aramco prepares for a $100bn IPO, some investors are wary of state-backed oil companies.

AB Inbev's offer for SABMiller is less attractive after sterling's fall, but don't think it's all off.

IN THE PAPERS

The government stunned the energy industry late Thursday by announcing a further review of the Hinkley Point nuclear power station hours after France’s EDF approved the project. The Times (£)

Britain’s new relationship with the EU must address voters’ concerns about freedom of movement within the bloc, Prime Minister Theresa May said during her inaugural trip to Eastern Europe. WSJ

Facebook said it could be on the hook for $3 billion to $5 billion in additional taxes as a result of an Internal Revenue Service investigation into how the social network transferred assets overseas. WSJ

The owner of Pinewood Studios, home to the James Bond and Star Wars films, is set to be sold to a real estate private equity fund for £323 million. Financial Times (£)

Rail firms have buckled under public pressure and pledged to overhaul ticketing after a Times investigation found millions of passengers were paying more. The Times (£)

BAE Systems’ chief Ian King will remain at the helm into next year with his successor, chief operating officer Charles Woodburn, not expected to take over the reins until after the annual results. The Telegraph

MARKETS TODAY

The FTSE 100 opened lower on Friday as investors digested the latest batch of earnings and as the Bank of Japan decided on a modest dose of monetary stimulus, but fell short of sweeping new measures. The FTSE was -0.2% in early trading with IAG and Reckitt Benckiser down the most after results disappointed. Barclays rose around 4.5% despite saying that first half profit fell by almost a third.

In Asia, stocks were mostly lower but Japan's Nikkei managed to eke out gains. The BOJ said it would buy ¥6 trillion ($58 billion) worth of exchange-traded stock funds annually, up from ¥3.3 trillion previously. It didn't change its targets for purchasing government bonds or reduce its main interest rate in a suggestion that it may be running up against limits of monetary policy. Asian shares were sent broadly lower after the BOJ decision, but losses were capped as the market had already pared expectations before the announcement. The yen remained higher against the dollar at 103.35. In the US, a deluge of earnings reports Thursday swung individual stocks but left major US indices near where they started the day.

Stocks to Watch: Barclays 1H core profit before tax increased 19% to £3,967 million; UBS profit falls but beats forecasts; Sanofi profit down as diabetes drug sales slip; ArcelorMittal posts surge in profit on exceptional item; InBev profit hit by foreign exchange charge; IAG 1H net profit €544 million; Reckitt Benkiser 1H pretax profit £751 million; Pearson 1H pretax loss £306 million; backs FY guidance.

COMING UP Eurozone GDP figures are due. Growth is expected to be 0.3% for the second quarter, down from the first quarter reading of 0.6%. Year-on-year growth is expected to fall to 1.6%, from 1.7%. Later, US GDP figures will be closely watched. Growth is forecast to have increased to 2.6% in the second quarter as the economy rebounds from a weak first quarter.