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(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Germany through the worst of its downturn, peace in the trade war and green shoots for the global economy next year.It’s what investors have long dreamed of. Now, they’re starting to believe it.Confidence in Germany’s economy has risen to a six-month high, while a Bank of America survey showed a record surge in optimism about the global outlook. Stocks have rallied and the U.S. 10-year yield is back up near 2%, after recession fears drove it well below that level this summer.Part of the uptick may reflect hopes that the U.S. and China are closer to a trade accord, while economic surveys are offering signs that the manufacturing-led slowdown has troughed. More recently, there’s been news that the Trump administration may delay a decision to slap tariffs on European cars -- a welcome development for Germany’s auto industry.The improvement in the ZEW -- which dropped to a near eight-year low over the summer -- comes just two days before data are expected to show Germany sank into a technical recession in the third quarter. But that’s effectively old news, and the improvement in forward-facing indicators means many are looking past it.Growth in Europe’s largest economy will probably resume this quarter, though remain at a very sluggish pace well into 2020.But the sense of hope is helping global equities, with the S&P 500 and Germany’s DAX among indexes near record highs. Benchmark Treasury yields have risen 25 basis points this month, setting them toward a break above 2%. Capturing the mood, the Bank of America survey also said investors sold more defensive stocks, such as utilities and staples, while turning to assets sensitive to the economic cycle, like value shares, financials and equities in the euro area.“Of course, it is early days. The hard data is still bad,” said Florian Hense, an economist at Berenberg. “But if genuine economic data start to confirm the message from markets and financial analysts, we can usually be reasonably confident that better times are ahead again.”The outlook is murky in parts. Not least because of the U.K. election next month and the ongoing, though reduced, risk of a no-deal Brexit. U.S. President Donald Trump, who speaks in New York later, could also derail the optimism if he pushes back on hopes about the chance of a U.S.-China trade deal.Any near-term relief on auto tariffs don’t necessarily mean a change the broad trend of trade tensions that will continue to weigh on global growth, according to HSBC global chief economist Janet Henry. HSBC sees the U.S. expansion slowing to 1.7% in 2020, below the 1.8% Bloomberg consensus.“We are operating in a different world of ongoing de-globalization trends,” she said on Bloomberg TV on Tuesday. “The bigger picture is going to be with us in the coming years.”To contact the reporter on this story: Fergal O'Brien in Zurich at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Stirling at email@example.com, Michael Hunter, Sid VermaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Major Hong Kong banks spent their morning telling employees to commute carefully, and by afternoon began urging them to consider going home as police lobbed tear gas at protesters on the streets outside.“Your safety is our top priority,” HSBC Holdings Plc wrote to staff around lunchtime, inviting them to use their judgment in leaving and noting the firm will remain open. “Please take laptops home if you are able to work remotely.”Most of the city’s major investment banks and other financial firms tried to operate normally, though some lenders closed branches near flareups as a precaution, after the death of a student fueled a surge of unrest. For much of Hong Kong, the morning presented one of the tensest commutes in months as demonstrations closed some subway stations. As employees arrived at JPMorgan Chase & Co.’s main offices, police in riot gear could be seen gathering across the street.Pro-democracy demonstrations escalated further after an officer shot two protesters. By lunch, television footage showed workers in business suits and skirts covering their faces and flocking into the Landmark Mall in Central -- an area flanked by bank towers -- to escape tear gas. Meantime, banks sent workers fresh waves of emails urging them to be careful.Bank of America Corp. and Goldman Sachs Group Inc. also gave employees the option of heading out, and UBS Group AG is planning a similar move, according to people with direct knowledge of the internal conversations.“Ongoing public events are impacting travel and may continue in the coming days,” HSBC said in its message to staff. “You are encouraged to make plans to leave the office early and under safe conditions if you foresee disruption to your commute.”BNP Paribas SA promised workers it would monitor the situation and alert them to new developments. Employees there can confer with managers to decide what to do.“Continue to exercise care and caution whilst traveling to or around our office premises,” the bank cautioned them in a memo. “Please also remember to carry your laptops to and from work on a daily basis.”\--With assistance from Bei Hu.To contact the reporters on this story: Alfred Liu in Hong Kong at firstname.lastname@example.org;Cathy Chan in Hong Kong at email@example.comTo contact the editors responsible for this story: Jun Luo at firstname.lastname@example.org, David ScheerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Financial Industry Regulatory Authority said Bank of America's Merrill Lynch unit will pay at least $4 million and two Raymond James units will pay $8.03 million, after failing to ensure that financial advisers properly took fees into account when recommending investments in so-called 529 savings plans. FINRA said the supervisory failures caused Merrill and Raymond James customers, especially those with young children many years away from college, to incur higher fees than they should have.
(Bloomberg) -- For all its political woes and still-stale economy, Brazil is standing out to investors as an unlikely island of stability as trouble brews across Latin America.Money managers from Pacific Investment Management Co. and BlackRock Inc. are among those bullish on the nation’s assets. The main reason is the extensive reform agenda of the government, which after successfully overhauling a burdensome pension system now plans to tackle everything from a notoriously complicated tax system to a bloated state structure. The central bank has added to the optimism by slashing interest rates to a record as inflation runs below the target.Listen to the Speaking of EM podcast on Brazil here.It’s a very different picture elsewhere in the region, which has been engulfed by growing political turmoil. Over the past few weeks, Chile and Ecuador declared states of emergency amid violent protests, Argentina tightened capital controls after the election of Alberto Fernandez, Peru’s President shut the congress, and clashes erupted in Bolivia after Evo Morales was elected for a fourth term as president.“Brazil is certainly standing out,” said Axel Christensen, the chief strategist for Latin America at BlackRock in New York. The prospect of tax, federal and administrative reforms, combined with low rates, are all boosting investor appetite for the country, he said.The upbeat mood is clear in asset moves, which have mostly shrugged off the infighting in the ruling party and controversies surrounding President Jair Bolsonaro. The Brazilian real was the best performer in the region last month and stocks are trading at an all-time high. The main exchange-traded fund dedicated to the country’s stocks, the $9.4 billion iShares MSCI Brazil ETF, just had its biggest monthly inflow this year, and country’s risk as measured by five-year credit default swaps is at the lowest level since 2013 -- a time when Brazil’s debt was still rated investment grade.“While Brazil is no stranger to political turmoil, its political class has started to understand the need to shield the economic agenda from political noise,” said Ismael Orenstein, a money manager at Pimco in Newport Beach who’s overweight Brazil’s local assets. “We are also starting to see some green shoots on the activity and credit side that make us more positive on the outlook for economic growth and assets such as the currency and corporate credit.”This week, Brazil’s government announced a series of economic measures, with officials outlining plans to halt minimum wage increases, decentralize the budget and resume privatization of the utility Eletrobras. The country is also holding what may be the world’s priciest-ever sale of oil prospects.After years of growth disappointments, some analysts are becoming more bullish on Brazil’s economy, saying 2020 is the year the country will finally deliver a positive surprise. They are betting record low borrowing costs will boost lending and consumer spending, and the conclusion of the pension reform after years of debate will give foreign investors more confidence to put money in the country.Progress in the reform agenda, low inflation and monetary easing are already lifting confidence levels and this could indicate a sustained recovery in economic activity, Bank of America Merrill Lynch economists led by David Beker wrote in a Wednesday report. They recently revised up their growth forecast for next year to 2.4% from 1.9%, above the market median of 2%.“Getting pension reform passed is going to be big in the short and long term, and the government still seems serious and optimistic about plans to privatize more assets,” said Brendan McKenna, a currency strategist at Wells Fargo Securities LLC in New York.His optimism doesn’t spread to all the rest of the region. McKenna says he has become more worried about Chile, as the cancellation of the Apec Summit in Santiago “admits some type of defeat,” while Argentina is “still a mess.” He’s more bullish on Colombia, where he says the economy is doing relatively well and inflation is low and somewhat stable.In Mexico, meanwhile, bearish views are mounting. Morgan Stanley on Wednesday recommended taking profit in the country’s assets as the risk of a fiscal slippage, unlikelihood of a growth pick up, heavy positioning and stretched valuations mean the returns are no longer compensating the risk. They said at current prices they prefer to hold Brazil’s sovereign bonds over Mexico’s, especially in the 10 to 30 year space.“Brazilian assets have further upside, mainly due to the impact of lower rates, privatization and micro economic reforms,” said Gustavo Medeiros, the deputy head of research at Ashmore Group Plc in London. “It won’t be a straight line, but the case for a sustainable rebound on earnings and subsequently investment and GDP growth is there.”(Adds economic measures and oil auction in seventh paragraph, analysts comments in ninth and 12th paragrahs.)To contact the reporter on this story: Aline Oyamada in Sao Paulo at email@example.comTo contact the editors responsible for this story: Carolina Wilson at firstname.lastname@example.org, Julia Leite, Philip SandersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The public platform, IBM's first industry-specific cloud, is designed to meet the high regulatory, security and resiliency standards required of the financial services industry. "By setting a standard that addresses the concern of hosting highly confidential information, we aim to drive the public cloud to a safety level that is unmatched,” said Cathy Bessant, chief operations and technology officer of Bank of America. Bank of America has focused on its internal cloud computing capabilities.
The Zacks Analyst Blog Highlights: Bank of America, Fannie Mae, JPMorgan, Citigroup and Wells Fargo
Banks' worries will likely ease as the HUD issues a MOU with the DOJ for the appropriate use of the False Claims Act in relation to violations by FHA-insured mortgage lenders.
Bank of America today announced that it is accelerating the move from its current U.S. minimum hourly rate of pay of $17 to $20 by the end of the first quarter of 2020, more than a year earlier than originally planned. “As part of our commitment to being a great place to work, we are saying thank you, and sharing our success with our teammates who serve our clients and communities every day,” said Sheri Bronstein, chief human resources officer at Bank of America. Bank of America is committed to supporting a competitive rate of pay, and has made regular increases to its minimum wage over many years.
Wall Street banking giants - JPM, BAC, C and WFC's - third-quarter results reflect consumer banking strength and adverse impact from lower interest rates.
Investing.com - Futures surged on Monday after news that American companies could be licensed to sell to Huawei and a strong jobs report last week helped lift sentiment.
Zacks Value Trader Highlights: Bank of America, PNC Financial, US Bancorp, Goldman Sachs and M&T Bank
(Bloomberg Opinion) -- It’s rare for a European bank to be adding businesses nowadays, as capital constraints curtail dealmaking. The takeover of Deutsche Bank AG’s hedge fund activities by France’s BNP Paribas SA is an exception.There’s no mistaking what’s driving BNP: Absorbing a larger competitor with a chunky client base is one way to try to salvage its own ailing hedge fund division, and to stop its rivals from snapping up Deutsche’s clients themselves. Yet the French bank’s struggles in this business beg the question as to how easily the two units can be combined, let alone expanded.Income from BNP’s equity arm and its operations servicing hedge funds (which sit together in one division of the bank) declined for the fourth consecutive quarter in the three months to September — a fall of 15% this time. A drop in equity derivatives revenue was offset partially by a slight increase in hedge fund business. That’s no doubt a signal from BNP that its gradual absorption of Deutsche’s unit is already encouraging more hedge funds to start using the French bank.BNP is taking over Deutsche Bank’s electronic trading platforms and wants to snag as many as possible of the German lender’s customers. It aims within a year to become one of the world’s top-four prime brokerages (which service hedge funds), Bloomberg News has reported. Ultimately it’s seeking to hold about $300 billion in hedge fund money, or “balances” in industry parlance. That compares with the $500 billion that JPMorgan Chase & Co. already oversees as one of the market leaders. The U.S. bank is eyeing $1 trillion.For the French lender, the long slog is just starting. While the takeover will be completed at the end of 2019, it will take another two years for as many as 1,000 Deutsche employees to move over to BNP. You need to tread carefully when hedge funds have the option of shifting their money to the big Wall Street prime brokerages. Deutsche’s clients have already been defecting and it’s uncertain how much of the $80 billion or so of balances it held in September will transfer across to BNP ultimately.After buying Bank of America Corp.’s prime broking activities in 2008, BNP has stayed focused on U.S. clients. Deutsche should bring more exposure to Asian and European clients, and its trading technology should let BNP go after big quant fund customers.The biggest difficulty is avoiding a culture clash. This deal will mean a sharp rise in the number of products the French bank offers to hedge funds, and its volume of work. Before now, its prime brokerage has been cautious when deciding the type of business (and client) it’s prepared to take on. Deutsche’s has been more adventurous. Melding these different approaches on how much leverage and risk to allow will be critical.There’s about $450 million of extra annual revenue up for grabs here, but BNP has more than $47 billion of yearly sales so it’s hardly game-changing. Venturing into the uncharted territory of a much bigger derivatives business will see BNP edging higher up the danger curve.To contact the authors of this story: Elisa Martinuzzi at email@example.comMarcus Ashworth at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Though lower interest rates and economic slowdown are expected to hurt banks' financials, strategic initiatives undertaken by them are likely to offer some support.
Shares of large US banks including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo were trading in the green in the after-hours.
(Bloomberg) -- China’s technology ambitions are at the epicenter of the nation’s trade dispute with the U.S. Not that you’d know it from the bond market.Credit investors who bought Chinese tech debt at the start of the year are sitting on a 13% return, more than any other sector, Bank of America Merrill Lynch indexes show. Industry titans from JD.com, Inc. to Tencent Holdings Ltd. and Sunny Optical Technology Group Co. are in favor with $213 billion wealth manager Pictet Wealth Management. With the trade war hanging over the global economy and tech in particular, this may seem counterintuitive. But President Donald Trump’s efforts to rein in Huawei Technologies Co. and force supply chain changes have little impact on large parts of the industry that are focused on domestic demand. Plus, the revenues of tech manufacturers that don’t export to the U.S. aren’t directly hit by Trump’s tariffs.“There are no Asian countries that are completely immune to the U.S.-China trade conflict, but we do see some resilient Chinese corporates,” said Thomas Wu, head of Asia fixed income at Pictet, highlighting Sunny Optical, JD.com and Tencent. “The tech-internet sector has been quite defensive in terms of how it’s faring in the trade war.”While the trade tariffs have seen some component makers like Sunny Optical look to set up factories outside China, their revenues are still largely dependent on customer demand, according to Bloomberg Intelligence analyst Charles Shum.Domestic consumers accounted for 84% of Sunny Optical’s revenue last year, while exports to the U.S. contributed only 2.1%, according to data compiled by Bloomberg. For online retailer JD.com and internet giant Tencent, domestic demand accounted for at least 97% of their revenue in 2018.Even Huawei bonds aren’t faring too badly. The tech giant’s parent Huawei Investment & Holding Co. saw a strong onshore yuan bond debut last week, spurred in part by nationalistic buying. Its dollar bonds due 2026 and 2027 have returned at least 18% this year, beating the 10% from a Bloomberg Barclays index for emerging markets in Asia. Local demand accounted for more than half of the firm’s revenue last year.U.S. regulators are set to vote next month on a proposal to prevent government subsidies from being spent on gear from Huawei. The Trump administration in May moved to restrict U.S. companies from doing business with the Chinese tech giant, but it has since issued temporary licenses allowing some sales to the company.For the best returns from investing in Chinese corporate bonds, “technology selections need to be internally focused rather than exposed to what’s going on outside,” said Leo Hu, senior portfolio manager for hard-currency emerging market debt at NN Investment Partners Ltd., who doesn’t expect the U.S. to lower the tariffs on Chinese goods in the near term.Firms focused on certain parts of technology as well as the consumer sector will be the “rising stars” for China credit, according to Hu. The country’s large population and established industrial ecosystem will support its tech sector, he said.(Corrects name of fund in second paragraph of story initially published Oct. 29)To contact the reporters on this story: Rebecca Choong Wilkins in Hong Kong at firstname.lastname@example.org;Annie Lee in Hong Kong at email@example.comTo contact the editors responsible for this story: Neha D'silva at firstname.lastname@example.org, Magdalene FungFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
All of the future models in this list, once they identify as LGBT+, can be in any position in a company and can be any nationality and based in any country.
"A critical part of our commitment to making Bank of America a great place to work is our ongoing focus on recognizing achievements and sharing our success," Chief Executive Officer Brian Moynihan said in a memo addressed to employees. The bank has paid out about $1.6 billion in special bonuses since 2017 and has set goal of raising its minimum wage to $20 over the next two years from $13.50 in 2017. The bonuses were reported earlier by Bloomberg.
(Bloomberg) -- Bank of America Corp. plans to pay its employees special bonuses for a third straight year after reporting record earnings in four of the past five quarters.The lender will give $1,000 in December to eligible employees who earn $100,000 or less annually, while higher-paid staff will receive a stock award next year, Chief Executive Officer Brian Moynihan said Tuesday in an internal memo. As they did last year, the payouts will apply to about 95% of the company’s workforce.“While our initial special compensation award originated from the benefits our company experienced from U.S. tax reform, our continued strong performance has allowed us to once again share the company’s success,” Moynihan wrote in the memo.Bank of America posted four quarters of record net income starting in mid-2018 before snapping that streak in the third quarter with an impairment charge linked to its exit from a payments joint venture. The three years of bonuses total about $1.6 billion, according to the memo.“You have to be able to drive profits, growth and success as a company, and you have to address the broader aims of society,” Moynihan said in an interview in New York this month.Under the latest plan, employees who earn $100,000 to $350,000 will be granted 200 to 500 restricted stock units in the first quarter.The lender will run print ads in more than 90 local markets touting the program, alongside photos and email addresses for its market presidents in those areas.To contact the reporter on this story: Lananh Nguyen in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Daniel Taub, Steven CrabillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
While trade-sensitive tech stocks will gain as phase-one negotiation is progressing well, rate cut hopes will drive capital intensive utility stocks.