JP Morgan and Bank of America posted record profits, but investors worry it’s downhill from here

The two biggest U.S. banks each just posted record first-quarter profit, the result of years of work building coast-to-coast franchises that have attracted billions in customer deposits. On Friday, J.P. Morgan Chase said it made $9.2 billion in the first three months of the year. Bank of America said Tuesday that it generated $7.3 billion. Bank of America just posted more quarterly profit than at any time in its history this week, but analyst Matthew O’Connor was worried about what next year loo


The two biggest U.S. banks each just posted record first-quarter profit, the result of years of work building coast-to-coast franchises that have attracted billions in customer deposits. On Friday, J.P. Morgan Chase said it made $9.2 billion in the first three months of the year. Bank of America said Tuesday that it generated $7.3 billion. Bank of America just posted more quarterly profit than at any time in its history this week, but analyst Matthew O’Connor was worried about what next year loo
JP Morgan and Bank of America posted record profits, but investors worry it’s downhill from here Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-17  Authors: hugh son, scott mlyn
Keywords: news, cnbc, companies, jp, morgan, banks, sputter, slow, america, week, posted, profit, profits, bank, downhill, worried, record, warned, work, worry, investors


JP Morgan and Bank of America posted record profits, but investors worry it's downhill from here

The two biggest U.S. banks each just posted record first-quarter profit, the result of years of work building coast-to-coast franchises that have attracted billions in customer deposits.

On Friday, J.P. Morgan Chase said it made $9.2 billion in the first three months of the year. Bank of America said Tuesday that it generated $7.3 billion.

But investors’ darkest fear about the industry – that if the Federal Reserve really is done raising rates for the foreseeable future, banks’ main profit-making engine will sputter – is becoming apparent.

Bank of America just posted more quarterly profit than at any time in its history this week, but analyst Matthew O’Connor was worried about what next year looks like. The bank’s CFO warned that growth in net interest income would slow by half to 3 percent this year, below some analysts’ estimates.


Company: cnbc, Activity: cnbc, Date: 2019-04-17  Authors: hugh son, scott mlyn
Keywords: news, cnbc, companies, jp, morgan, banks, sputter, slow, america, week, posted, profit, profits, bank, downhill, worried, record, warned, work, worry, investors


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Can European banks be saved by a fresh round of deal making?

The comparisons with U.S. peers just got a lot harder for European banks after a strong showing from J.P. Morgan to kick off earnings season, but could there be fresh revenue on the way for European investment banks, even if it is of their own making? European banks have found themselves wedged into the same category as basic resources back in 2015: uninvestable. One banking commentator told CNBC this month that investors should forget about European banks’ NIMs expanding for a few years now. Ju


The comparisons with U.S. peers just got a lot harder for European banks after a strong showing from J.P. Morgan to kick off earnings season, but could there be fresh revenue on the way for European investment banks, even if it is of their own making? European banks have found themselves wedged into the same category as basic resources back in 2015: uninvestable. One banking commentator told CNBC this month that investors should forget about European banks’ NIMs expanding for a few years now. Ju
Can European banks be saved by a fresh round of deal making? Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-16  Authors: karen tso, prisma dukas, universal images group, getty images
Keywords: news, cnbc, companies, fresh, european, bank, making, banks, capital, round, nims, deutsche, saved, investors, investment, interest, consolidation, deal


Can European banks be saved by a fresh round of deal making?

The comparisons with U.S. peers just got a lot harder for European banks after a strong showing from J.P. Morgan to kick off earnings season, but could there be fresh revenue on the way for European investment banks, even if it is of their own making?

There’s a mooted capital raising for Deutsche Bank before any possible consolidation with Commerzbank. Meanwhile, Italian lender UniCredit is waiting in the wings let alone any other rival jumping on the bandwagon.

European banks have found themselves wedged into the same category as basic resources back in 2015: uninvestable.

The European Central Bank (ECB) folded and conceded its current hand of cards meant no chance of hiking its benchmark interest rate for the foreseeable future, delivering a dose of realism.

The loser wasn’t the ultra-dovish ECB President Mario Draghi, but bank investors stuck in a much dreaded value trap. Hope vanished for a long-awaited expansion in net interest margins (NIMs) for banks in 2019, which is essentially the profits that these banks make and is usually much better if rates are higher.

One banking commentator told CNBC this month that investors should forget about European banks’ NIMs expanding for a few years now.

To be fair bank bosses are trying everything. UBS resorted to verbal kitchen sinking recently, telling investors it had been saddled with the worst start to the year in many years.

Others are keeping a brave face, Santander is steadfast it can deliver lofty ROTE (return on tangible equity) targets of 13% to 15% in the medium term, up from 11.7% last year — because it has done it before in the face of headwinds.

Then there is all the noise of consolidation driven by the German lenders Deutsche Bank and Commerzbank. Typically, this news flow would mean “game on” for buying on mere consolidation hopes. Just not in European banks where merger and acquisitions have been slim. Any sector action — and that’s being kind using the word action — can be viewed as recovery after freefall last year.

There is a long laundry list of fears around the banks which can be best summarized as a lack of growth. But can deal-making actually save the day? Perhaps. Without growing capital, banks could be forced to sell assets or raise more capital. Activists have called for smaller investment banks at Deutsche Bank, Credit Suisse and Barclays so any extra business even from ill-fated mergers would be welcome.


Company: cnbc, Activity: cnbc, Date: 2019-04-16  Authors: karen tso, prisma dukas, universal images group, getty images
Keywords: news, cnbc, companies, fresh, european, bank, making, banks, capital, round, nims, deutsche, saved, investors, investment, interest, consolidation, deal


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Stocks making the biggest moves: Johnson & Johnson, Western Digital, Bank of America & more

Check out the companies making headlines midday Thursday:Johnson & Johnson — Johnson & Johnson rose 1.1% after the company reported quarterly results that beat analyst estimates. Netflix — Shares of Netflix rose 3% after Deutsche Bank upgraded the streaming company’s rating to buy from hold. “Netflix is becoming more of a cultural necessity for people around the world,” Deutsche Bank analyst Bryan Kraft wrote in a note. Western Digital — An analyst at Deutsche Bank upgraded the Western digital t


Check out the companies making headlines midday Thursday:Johnson & Johnson — Johnson & Johnson rose 1.1% after the company reported quarterly results that beat analyst estimates. Netflix — Shares of Netflix rose 3% after Deutsche Bank upgraded the streaming company’s rating to buy from hold. “Netflix is becoming more of a cultural necessity for people around the world,” Deutsche Bank analyst Bryan Kraft wrote in a note. Western Digital — An analyst at Deutsche Bank upgraded the Western digital t
Stocks making the biggest moves: Johnson & Johnson, Western Digital, Bank of America & more Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-16  Authors: fred imbert, adam jeffery
Keywords: news, cnbc, companies, moves, america, deutsche, shares, western, bank, stocks, rose, estimates, stock, analyst, company, earnings, biggest, making, johnson, digital


Stocks making the biggest moves: Johnson & Johnson, Western Digital, Bank of America & more

Check out the companies making headlines midday Thursday:

Johnson & Johnson — Johnson & Johnson rose 1.1% after the company reported quarterly results that beat analyst estimates. The company posted earnings of $2.10 per share, 7 cents higher than expected amid strong prescription drug sales. Johnson & Johnson’s revenue also topped expectations. The multinational also narrowed their 2019 fiscal year earnings guidance to $8.53-$8.63, while analysts estimate earnings of $8.58 per share.

BlackRock — Shares of the world’s largest asset manager rose over 3% after it beat estimates on its first-quarter profit. BlackRock’s total assets rose 3% year-over-year to $6.52 trillion.

Netflix — Shares of Netflix rose 3% after Deutsche Bank upgraded the streaming company’s rating to buy from hold. The bank cited the stock’s valuation and conservative consensus subscriber estimates for the upgrade. “Netflix is becoming more of a cultural necessity for people around the world,” Deutsche Bank analyst Bryan Kraft wrote in a note.

J.B. Hunt Transport Services — Shares of the trucking and transportation company dropped nearly 5% after it missed Wall Street estimates in its first quarter earnings. J.B. Hunt reported $1.09 earnings per share, compared to Refinitiv’s estimated $1.26. The company cited bad weather in the Midwest as the cause of its low volume.

UnitedHealth Group — UnitedHealth Group dropped 4% after CEO David Wichmann warned that “Medicare for All” proposals pushed by Democratic lawmakers and presidential candidates would “destabilize the nation’s health system.”

Chevron — The energy giant’s stock rose 0.9% after a court ruled that Chevron does not have to pay $9.5 billion to the Ecuadorian government in a pollution-related case.

Western Digital — An analyst at Deutsche Bank upgraded the Western digital to buy from hold, citing an attractive valuation and conservative subscriber estimates. The company’s stock rose 4.7%.

KAR Auction Services — Activist investor Jeffrey Smith unveiled a stake in the car auction company, sending its stock up more than 2%.

Bank of America — The banking giant’s stock rose 0.1% after reporting better-than-expected earnings. However, CFO Paul Donofrio said annual net interest income would grow at about half the pace it did in 2018.

—CNBC’s Jessica Bursztynsky and Nadine El-Bawab contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-04-16  Authors: fred imbert, adam jeffery
Keywords: news, cnbc, companies, moves, america, deutsche, shares, western, bank, stocks, rose, estimates, stock, analyst, company, earnings, biggest, making, johnson, digital


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Goldman Sachs CEO David Solomon slashes pay for his employees as revenue drops

Being a Goldman Sachs trader or banker is about to get less lucrative. The bank cut compensation and benefits set aside for employees in the first quarter by 20% to $3.26 billion, or about $90,780 for each of the bank’s 35,900 workers. A year ago, that figure was $119,323 for each of the bank’s 34,000 workers. That’s Goldman’s estimate of its employees’ share of revenue for just the first three months of the year, meaning that the bank will set aside more in pay as 2019 progresses. For senior tr


Being a Goldman Sachs trader or banker is about to get less lucrative. The bank cut compensation and benefits set aside for employees in the first quarter by 20% to $3.26 billion, or about $90,780 for each of the bank’s 35,900 workers. A year ago, that figure was $119,323 for each of the bank’s 34,000 workers. That’s Goldman’s estimate of its employees’ share of revenue for just the first three months of the year, meaning that the bank will set aside more in pay as 2019 progresses. For senior tr
Goldman Sachs CEO David Solomon slashes pay for his employees as revenue drops Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: hugh son, andrew harrer, bloomberg, getty images
Keywords: news, cnbc, companies, solomon, drops, yearend, set, slashes, traders, workers, employees, ceo, goldman, david, bank, banks, aside, pay, workersthats, compensation, sachs, revenue


Goldman Sachs CEO David Solomon slashes pay for his employees as revenue drops

Being a Goldman Sachs trader or banker is about to get less lucrative.

The bank cut compensation and benefits set aside for employees in the first quarter by 20% to $3.26 billion, or about $90,780 for each of the bank’s 35,900 workers. A year ago, that figure was $119,323 for each of the bank’s 34,000 workers.

That’s Goldman’s estimate of its employees’ share of revenue for just the first three months of the year, meaning that the bank will set aside more in pay as 2019 progresses. For senior traders and investment bankers, most compensation comes in the form of year-end bonuses paid early next year.


Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: hugh son, andrew harrer, bloomberg, getty images
Keywords: news, cnbc, companies, solomon, drops, yearend, set, slashes, traders, workers, employees, ceo, goldman, david, bank, banks, aside, pay, workersthats, compensation, sachs, revenue


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Cramer: Trump treats the Fed like a ‘pinata,’ but don’t expect Powell to buckle

Federal Reserve Chairman Jerome Powell is unlikely to surrender to political pressure and “quit” despite the repeated attacks from President Donald Trump, CNBC’s Jim Cramer said Monday. The president has been treating the central bank like a “pinata,” Cramer said on “Squawk on the Street.” Cramer said he expects Trump may have “got the wrong guy” when he chose Powell to lead the Fed. Trump nominated Powell in November 2017 to succeeded Janet Yellen as central bank chair. But Cramer expressed ren


Federal Reserve Chairman Jerome Powell is unlikely to surrender to political pressure and “quit” despite the repeated attacks from President Donald Trump, CNBC’s Jim Cramer said Monday. The president has been treating the central bank like a “pinata,” Cramer said on “Squawk on the Street.” Cramer said he expects Trump may have “got the wrong guy” when he chose Powell to lead the Fed. Trump nominated Powell in November 2017 to succeeded Janet Yellen as central bank chair. But Cramer expressed ren
Cramer: Trump treats the Fed like a ‘pinata,’ but don’t expect Powell to buckle Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: berkeley lovelace jr, scott mlyn
Keywords: news, cnbc, companies, dont, buckle, president, street, fed, expect, bank, guy, feds, pinata, central, treats, powell, trump, cramer


Cramer: Trump treats the Fed like a 'pinata,' but don't expect Powell to buckle

Federal Reserve Chairman Jerome Powell is unlikely to surrender to political pressure and “quit” despite the repeated attacks from President Donald Trump, CNBC’s Jim Cramer said Monday.

The president has been treating the central bank like a “pinata,” Cramer said on “Squawk on the Street.” But Powell “ain’t quittin’. … This is a guy who is doing his job. He’s adjusted to doing his job.”

Cramer spoke after the Wall Street Journal reported that former Fed officials and foreign central bankers worry that Trump’s combative stance toward the U.S. central bank could weaken the institution. They say the president’s approach could erode nonpartisanship in the Fed’s boardroom over time, according to the Journal.

Trump has blamed the Fed’s policies, particularly on interest rates, for previous declines in the stock market and slow economic growth.

On Sunday, the president renewed his attack on the central bank in a tweet, saying, “If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%.”

Cramer said he expects Trump may have “got the wrong guy” when he chose Powell to lead the Fed. But the president shouldn’t expect Powell to respond to his criticisms now.

Trump nominated Powell in November 2017 to succeeded Janet Yellen as central bank chair. Powell has been a member of the Fed’s board of governors since 2012.

Cramer has also been critical of Powell since the Fed chairman’s remarks on Oct. 3 that the cost of borrowing money was a long way from so-called neutral, sparking concerns about possibly more aggressive Fed tightening.

But Cramer expressed renewed optimism about Powell’s leadership in March when the central bank indicated it would stall interest rate increases for the year.

“I thought that Jay was great,” Cramer said at the time. “It’s not easy to start. You make your rookie mistakes, you come back. He’s a great guy. Anyone who knows him knows that he course corrected.”


Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: berkeley lovelace jr, scott mlyn
Keywords: news, cnbc, companies, dont, buckle, president, street, fed, expect, bank, guy, feds, pinata, central, treats, powell, trump, cramer


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Bank of Japan chief: Trade is the biggest risk to the global economy

Increasing trade protectionism around the globe is the biggest threat to global economic growth, Bank of Japan Governor Haruhiko Kuroda says. “There [is] some sort of protectionism” around global trade, Kuroda told CNBC’s Sara Eisen in an interview that aired Monday. “That is I think most serious risk involved in the global economy.” Investors have been fretting over the possibility of a protracted trade war as it could hinder future corporate profits. “By the way, [the] IMF world economic outlo


Increasing trade protectionism around the globe is the biggest threat to global economic growth, Bank of Japan Governor Haruhiko Kuroda says. “There [is] some sort of protectionism” around global trade, Kuroda told CNBC’s Sara Eisen in an interview that aired Monday. “That is I think most serious risk involved in the global economy.” Investors have been fretting over the possibility of a protracted trade war as it could hinder future corporate profits. “By the way, [the] IMF world economic outlo
Bank of Japan chief: Trade is the biggest risk to the global economy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: fred imbert, jiji press, afp, getty images
Keywords: news, cnbc, companies, uschina, protectionism, japan, sides, 2019, war, chief, risk, policy, bank, trade, economic, biggest, global, kuroda, economy


Bank of Japan chief: Trade is the biggest risk to the global economy

Increasing trade protectionism around the globe is the biggest threat to global economic growth, Bank of Japan Governor Haruhiko Kuroda says.

“There [is] some sort of protectionism” around global trade, Kuroda told CNBC’s Sara Eisen in an interview that aired Monday. “That is I think most serious risk involved in the global economy.”

Kuroda’s comments come as China and the U.S. try to strike a trade deal that would end an ongoing tariff war. The two sides appear to be closing in on a deal.

The Chinese made unprecedented proposals on forced technology transfers, a sticking point in the negotiations, Reuters reported earlier. Treasury Secretary Steven Mnuchin also said on Sunday the U.S. is open to facing penalties if it doesn’t comply with an agreed-upon trade deal. However, Mnuchin also said Monday the two sides still have lots of work ahead of them.

Investors have been fretting over the possibility of a protracted trade war as it could hinder future corporate profits. The International Monetary Fund also cut its economic growth forecast for 2019 to 3.3% from 3.5%, with trade among the risks cited.

“By the way, [the] IMF world economic outlook main scenario does assume the U.S.-China trade conflict will not worsen,” Kuroda said. If it worsens, it could lead to a different outlook for the global economy.

Still, Kuroda said the Chinese economy is “likely to recover in the second half” of 2019, highlighting the “huge fiscal stimulus measures the government has already decided.”

Global equities have been on a tear lately, with the iShares MSCI ACWI ETF surging more than 15% in 2019. On top of getting a boost from the perceived progress in U.S.-China trade talks, stocks have benefited from a pivot away from tighter monetary policy from the major central banks.

But Kuroda said there may be more room for central-bank easing, although he added that looser policy is note needed right now.

Subscribe to CNBC on YouTube.


Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: fred imbert, jiji press, afp, getty images
Keywords: news, cnbc, companies, uschina, protectionism, japan, sides, 2019, war, chief, risk, policy, bank, trade, economic, biggest, global, kuroda, economy


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As Goldman Sachs drags on financials, Cramer and other experts weigh in on bank earnings

Financials stocks came under pressure Monday after declining revenue from Citigroup and Goldman Sachs soured the positive earnings news out from J.P. Morgan last week. Ahead of earnings from Bank of America and Morgan Stanley later this week, five experts weigh in on the mixed quarter for the big banks so far. Morgan Stanley back above its 200-day moving average for the first time in a year. “For those looking at bank stocks and your financials in general, I’d be looking at the large-cap big one


Financials stocks came under pressure Monday after declining revenue from Citigroup and Goldman Sachs soured the positive earnings news out from J.P. Morgan last week. Ahead of earnings from Bank of America and Morgan Stanley later this week, five experts weigh in on the mixed quarter for the big banks so far. Morgan Stanley back above its 200-day moving average for the first time in a year. “For those looking at bank stocks and your financials in general, I’d be looking at the large-cap big one
As Goldman Sachs drags on financials, Cramer and other experts weigh in on bank earnings Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: keris lahiff, andrew harrer, bloomberg, getty images, eduardo munoz, daniel acker, kcna, thomas barwick getty images, source, lawrence mcdonald
Keywords: news, cnbc, companies, financials, earnings, cramer, think, experts, sachs, sign, morgan, big, bank, drags, weigh, stocks, actually, stanley, goldman, quarter, thing


As Goldman Sachs drags on financials, Cramer and other experts weigh in on bank earnings

Financials stocks came under pressure Monday after declining revenue from Citigroup and Goldman Sachs soured the positive earnings news out from J.P. Morgan last week.

Ahead of earnings from Bank of America and Morgan Stanley later this week, five experts weigh in on the mixed quarter for the big banks so far.

Chris Verrone, head of technical analysis at Strategas Research, said a steep decline last year should give some of these names a pop.

“Goldman, Morgan, they had 40% declines last year. These were devastating bear markets. We think they’re bottoming. Morgan Stanley back above its 200-day moving average for the first time in a year. Maybe this is a sign that the yield curve actually steepens here. Maybe this is a sign that rates actually go up. … It’s a broad call for us. We think rates are starting to bottom here. We think frankly signs of cyclicality are emerging everywhere and banks benefit from that.”

Jeffrey Harte, principal at Sandler O’Neill, said it’s best to bet on the largest of the financials and sees one winner among them.

“For those looking at bank stocks and your financials in general, I’d be looking at the large-cap big ones. Citi is one I like a lot and they reported this morning and actually the numbers look really good. The big thing we needed to see was consumer growth and we saw it. They kind of delivered on the big market skepticism there.”

Jim Cramer, host of CNBC’s “Mad Money,” said it was an uneven quarter with some bright spots that should continue.

“They key thing to recognize is March was great. January was weak … March was full bore, continuing, that’s what matters, not what happened this quarter but what was happening and what’s going to happen in subsequent quarters. It could be an opportunity.”

Stephen Weiss, founder and managing partner at Short Hills Capital, said regulatory headwinds from Washington might linger.

“This is a group that just hadn’t done well, it’s sort of been ignored. Now it’s done quite well so it snuck up on you. … There’s no basis for regulating them further and to the extent that we regulate them further you weaken the smaller competitors.”

Josh Brown, co-founder and CEO of Ritholtz Wealth Management, said major pre- and post-market moves in these stocks makes trading difficult.


Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: keris lahiff, andrew harrer, bloomberg, getty images, eduardo munoz, daniel acker, kcna, thomas barwick getty images, source, lawrence mcdonald
Keywords: news, cnbc, companies, financials, earnings, cramer, think, experts, sachs, sign, morgan, big, bank, drags, weigh, stocks, actually, stanley, goldman, quarter, thing


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Fed Chair Jerome Powell could resign if ‘browbeaten’ enough: Sri Kumar

In an interview with the CBS program “60 Minutes” in March, he was asked whether he listened to the president. When asked if the president could fire him, Powell said, “Well, the law is clear that I have a four-year term. The Fed last raised rates in December and at the time implied two hikes in 2019. However, in early January, Powell said the central bank would be “patient” in its approach to monetary policy. While he sees no rate hikes or rate cuts on the horizon, he thinks that could change s


In an interview with the CBS program “60 Minutes” in March, he was asked whether he listened to the president. When asked if the president could fire him, Powell said, “Well, the law is clear that I have a four-year term. The Fed last raised rates in December and at the time implied two hikes in 2019. However, in early January, Powell said the central bank would be “patient” in its approach to monetary policy. While he sees no rate hikes or rate cuts on the horizon, he thinks that could change s
Fed Chair Jerome Powell could resign if ‘browbeaten’ enough: Sri Kumar Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: michelle fox, jim watson, afp, getty images
Keywords: news, cnbc, companies, powell, rate, resign, president, bank, central, jerome, chair, sri, rates, kumar, fed, thinks, market, hikes, browbeaten


Fed Chair Jerome Powell could resign if 'browbeaten' enough: Sri Kumar

Powell, however, has dismissed such talk. In an interview with the CBS program “60 Minutes” in March, he was asked whether he listened to the president. He responded, “I don’t comment on the president or any elected official.” When asked if the president could fire him, Powell said, “Well, the law is clear that I have a four-year term. And I fully intend to serve it.”

The Fed last raised rates in December and at the time implied two hikes in 2019. However, in early January, Powell said the central bank would be “patient” in its approach to monetary policy. Then in March, the Federal Open Market Committee suggested no more rate increases will be coming this year.

Chicago Federal Reserve President Charles Evans told CNBC on Monday that he’d be comfortable leaving interest rates alone until autumn 2020 to help ensure sustained inflation in the U.S. However, he said he wouldn’t categorize the December 2018 rate hike as a mistake.

Sri-Kumar thinks the Fed loses credibility when it doesn’t recognize that it made an error, pointing to Powell’s “pivot” in January, just weeks after the central bank suggested two hikes for 2019.

“Something is wrong with that,” he said. “You can’t expect to be credible under those circumstances.”

In fact, he believes the Fed responded to the markets in shifting its policy this year. And that is not in its edict.

“The Fed’s mandate supposed to be employment and inflation.”

Sri-Kumar contends that if the central bank puts its plan on hold to increase rates and then helps the market go up, it creates a “moral hazard.”

“It tells me the Fed is going to be providing me a ‘Powell put’ and I can keep pushing up equity prices because if there is a correction, the Fed is going to support me.”

However, Art Hogan, chief market strategist at National Securities, believes the Fed’s change of heart had a lot to do with global economic conditions.

“Think back to how we felt about the world in December and how we think about it now. We certainly are in a different place,” he said on “Power Lunch.” “The Fed has done a good job at being very transparent, but they’re clearly at neutral.”

While he sees no rate hikes or rate cuts on the horizon, he thinks that could change since the Fed is data dependent.

“If the data improve, and that’s what markets would like see, they’ll probably have to raise rates, sooner rather than later,” Hogan said.

The Fed declined to comment on Sri-Kumar’s remarks.


Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: michelle fox, jim watson, afp, getty images
Keywords: news, cnbc, companies, powell, rate, resign, president, bank, central, jerome, chair, sri, rates, kumar, fed, thinks, market, hikes, browbeaten


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Goldman Sachs shares slump after posting worse-than-expected revenue decline

Goldman Sachs shares declined after posting first-quarter revenue below analysts’ estimates on tougher market conditions for the firm’s trading and investing divisions. The bank said Monday that revenue dropped 13 percent to $8.81 billion, below analyst’s $8.9 billion estimate. Considering the impact that tough trading conditions had on revenue, Goldman pulled a lever at its disposal: It lowered compensation for its employees. The investing and lending segment posted $1.84 billion in revenue, a


Goldman Sachs shares declined after posting first-quarter revenue below analysts’ estimates on tougher market conditions for the firm’s trading and investing divisions. The bank said Monday that revenue dropped 13 percent to $8.81 billion, below analyst’s $8.9 billion estimate. Considering the impact that tough trading conditions had on revenue, Goldman pulled a lever at its disposal: It lowered compensation for its employees. The investing and lending segment posted $1.84 billion in revenue, a
Goldman Sachs shares slump after posting worse-than-expected revenue decline Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: hugh son
Keywords: news, cnbc, companies, slump, estimate, billion, decline, worsethanexpected, analysts, share, trading, bank, goldman, shares, posting, sachs, revenue, quarter


Goldman Sachs shares slump after posting worse-than-expected revenue decline

Goldman Sachs shares declined after posting first-quarter revenue below analysts’ estimates on tougher market conditions for the firm’s trading and investing divisions.

The bank said Monday that revenue dropped 13 percent to $8.81 billion, below analyst’s $8.9 billion estimate. Meanwhile, the firm generated $2.25 billion of profit in the period, or $5.71 a share, exceeding the $4.89 estimate, the New York-based firm said in a release. That was largely from reining in compensation more than analysts had expected, according to a research note from Citigroup.

Goldman shares fell 3% to $201.50 at 10:38 a.m.

“We are pleased with our performance in the first quarter, especially in the context of a muted start to the year,” Goldman CEO David Solomon said in the release. “Our core businesses generated solid results driven by our strong franchise positions. We are focused on new opportunities to grow and diversify our business mix and serve a broader range of clients globally.”

Considering the impact that tough trading conditions had on revenue, Goldman pulled a lever at its disposal: It lowered compensation for its employees. The bank booked $3.26 billion in pay and benefits for the quarter, 20% less than a year ago and well below the $3.58 billion estimate. The firm also trimmed headcount by 2% from the fourth quarter.

Its institutional client services trading division, the firm’s biggest business by far, posted $3.61 billion in revenue for the quarter, an 18 percent decline from a year earlier. Revenues from fixed income and equities trading came in at $1.84 billion and $1.77 billion, essentially matching analysts’ estimates.

The company’s investment banking division posted revenue of $1.81 billion, roughly unchanged from a year earlier, as the firm’s advisory revenue jumped 51% to $887 million on robust mergers and acquisitions activity. That handily exceeded the $744 million estimate.

The investing and lending segment posted $1.84 billion in revenue, a 14 percent decline that was just shy of analysts’ $1.87 billion estimate. The drop was driven by “significantly lower net gains” from stakes in private equities and debt holdings.

But it was in Goldman’s smallest division, investment management, where results missed analysts expectations by the biggest margin. Revenue dropped by 12% to $1.56 billion, below analysts’ $1.71 billion estimate, on “significantly lower incentive fees and lower transaction revenues” amid tough markets.

The firm’s provision for credit losses climbed to $224 million in the quarter, roughly unchanged from the previous period but surging from the first quarter of 2018, where it was $44 million, as Goldman expanded its retailing lending operations.

The bank’s board voted to increase its quarterly dividend by 5 cents to 85 cents per share, a move that had been expected by investors.

It’s only Solomon’s second quarter running the bank, but analysts will have plenty of questions for him.

The investment bank, which historically counted governments, corporations and hedge funds as clients, took a notable step in its journey into consumer finance last month when its joint credit card with Apple was announced. Analysts will want to know what the economics of the deal mean for the New York bank.

The firm is working to grow existing businesses, diversify its businesses with new products and services and improve efficiency, Solomon said Monday.

Still, of the six biggest U.S. banks, Goldman is the most dependent on Wall Street activities, and that exposes them to the decline in trading in the quarter. J.P. Morgan Chase said last week that first-quarter trading revenue dropped 17 percent to $5.5 billion.

Solomon or CFO Stephen Scherr might also provide updates on a strategic review announced in October and progress on the bank’s $5 billion revenue-boosting plan, according to analyst Jason Goldberg of Barclays.

The bank is cutting expenses and capital from underperforming parts of the commodities business, Scherr said.

Another topic of discussion may be the bank’s 1MDB scandal. Goldman’s shares were battered last year in part because of the scandal, in which an ex-Goldman partner admitted to helping a Malaysian financier loot an investment fund of billions of dollars.

The shares have partially recovered this year, climbing more than 20 percent.

Here’s what Wall Street expected:

Earnings: $4.89 a share, down 30% from a year ago, according to Refinitiv.

Revenue: $8.9 billion, down 10% from a year earlier.

Trading revenue: Equities $1.81 billion; fixed income $1.77 billion, according to FactSet

Investing banking: $1.65 billion

Also Monday, Citigroup reported mixed first-quarter results, saying its earnings were boosted by share buybacks while revenues fell amid a sharp decline in equities trading. J.P. Morgan and Wells Fargo reported quarterly earnings on Friday that topped analyst expectations.


Company: cnbc, Activity: cnbc, Date: 2019-04-15  Authors: hugh son
Keywords: news, cnbc, companies, slump, estimate, billion, decline, worsethanexpected, analysts, share, trading, bank, goldman, shares, posting, sachs, revenue, quarter


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