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Banks threaten Brexit-exit, Pearson's shares tumble, and it's Davos day two. Here are some of the things people in markets are talking about today.
With economists questioning U.K. Prime Minister Theresa May's Brexit plan outlined in a speech yesterday, major banks are starting to quantify the effects on their London business. HSBC Holdings Plc Chief Executive Officer Stuart Gulliver said that operations generating about 20 percent of revenue may have to move to Paris, while Andrea Orcel, UBS Investment Bank president, said the bank will have to move employees from London following the U.K.'s exit from the EU. In other European bank news, Deutsche Bank Chief Executive Officer John Cryan apologized unreservedly as the bank agreed to pay $7.2 billion in a final settlement with the U.S. Justice Department over its handling of mortgage-backed securities before 2008.
Shares in publishing company Pearson Plc tumbled as much as 28 percent in trading this morning after the company cut its profit forecast in an unscheduled announcement. The company, which is the seventh most-shorted stock in the U.K.’s FTSE 100 Index, said it would sell its stake in the Penguin Random House book business. There was better news for Burberry Group Plc as the company reported better than expected results as the essential Asian market returned to growth.
Davos, day two
The Davos play is missing its prince, as conversations there are dominated by the absent President-elect Donald Trump. While attendees have expressed nervousness about Trump's populist policies, many are excited about fresh opportunities for business under his administration. The lone attendee from his incoming administration, hedge fund manager Anthony Scaramucci, described the PEOTUS as an “unbelievable strategist.” Bloomberg Television will continue to carry live coverage and interviews throughout the event.
Overnight, the MSCI AC Asia Pacific Index rose 0.3 percent, while Japan's Topix index added 0.3 percent. In Europe, the Stoxx 600 Index was 0.1 percent lower at 5:30 a.m. ET as investors wait for tomorrow's ECB meeting for indications as to when the bank will start to curtail its stimulus measures. S&P 500 futures added 0.1 percent.
Goldman Sachs Group Inc. and Citigroup Inc. are due to report earnings before the bell, with adjusted earnings per share of $4.84 and $1.12 expected, respectively. Later today, at 3:00 p.m. ET, Federal Reserve Chair Janet Yellen is due to take part in an economic discussion in San Francisco where she may comment on Trump's fiscal stimulus plans.
What we've been reading
This is what's caught our eye over the last 24 hours.
- German jobless mystery explained.
- Trump's options for weakening dollar extend far beyond Twitter...
- ...As Blackrock expects the currency to renew rally.
- China charts course for opening to more foreign investment.
- Central bank policy might have a problem, according to the central banks’ bank.
- By ripping NATO, Trump makes Europe nervous and the arms trade industry happy.
- Bad behavior database aims to stop rogue traders.