Finance

Wall Street banks had best quarter in years. They are firing traders anyway

Global investment banks reaped the most first-quarter revenue in three years, but that didn’t stop the industry from firing traders as a years-long contraction continues, according to a report. The world’s 12 biggest banks generated $43.9 billion in revenue from trading stocks and bonds and advising on mergers and security issuance, according to financial research firm Coalition. That’s 3.3 percent more than the year-earlier period as strong equities trading results offset declines in bond trading and investment banking, the firm said Thursday. But the industry still eliminated 6,000 employees in the quarter, falling to 52,100 front-office jobs such as trading, sales and advisory. That’s 13 percent fewer employees than in 2013. Nearly a decade after the financial cr...

Sanctioned tycoon Deripaska resigns as director of his firm Rusal

Russian metals tycoon Oleg Deripaska stepped down as a director of his aluminum firm Rusal as part of a choreographed series of steps which he hopes will persuade the U.S. government to rescind sanctions that have crippled his businesses. Deripaska is now actively preparing the next step: reducing his stake in En+, the group which controls Rusal, to a level where Washington would be willing to remove his businesses from its sanctions blacklist, three sources familiar with the discussions said. Deripaska and the biggest companies in his empire were included on a U.S. Treasury Department sanctions blacklist in April. Washington said he and fellow tycoons were profiting from association with a Kremlin conducting “malign activities” around the globe. The sanctions paralyzed Rusal&#...

Steve Cohen’s Point72 is bullish on Asia — and they like these sectors

Steve Cohen’s Point72 is aggressively expanding in Asia. The firm, which has more than 1,250 employees globally and $12 billion in assets under management, recently opened a larger office in Hong Kong, which can accommodate more than 160 employees — an increase from about 60 employees at the end of 2015. It has recently expanded its Singapore and Tokyo offices, too. This year, Point72 raised $3 billion from outside investors. The firm had been barred from accepting outside money in the wake of a settlement Cohen made in 2016 with the Securities and Exchange Commission. CNBC visited the firm’s new digs in Hong Kong, which is outfitted with a pool-table in its pantry, and includes free snacks, a massage room, air-quality monitoring and — similar to other Point72 offices — is deck...

The crackdown on cryptocurrencies is a good thing, say traders

Regulating cryptocurrencies is a good thing and it might even help advance the digital currency market, crypto trader Ran Neu-Ner told CNBC on Thursday. “When [regulators] come out with regulation, it’s going to open the floodgates for new money to come into crypto,” the host of CNBC Africa’s “Crypto Trader” said on “Fast Money.” While Neu-Ner said there will be crackdowns during this process, he encourages it. “I hope that they can catch the people [conducting fraudulent activities], because we have to weed out the bad actors,” said Neu-Ner, who is the founder of OnChain Capital and an early investor in bitcoin. “If we have bad actors, it’s going to create a lack of trust in this asset class,” he said. “If...

One Bank Discovers A ‘Staggering’ Stat Amid Italian Bond Selloff

Yeah, so over the weekend, in a kind of rambling piece penned while attempting to block out the noise from a literal outdoor aerobics class that convened around me unexpectedly (I sometimes write from a picnic table at a pavilion down by a local pier and unbeknownst to me, one local fitness instructor has decided that this tourist season, she’s going to commandeer that pavilion for her classes, presumably because it has a nice ocean view), I talked about the Italian “problem” in the context of ECB CSPP. You can read that linked post for yourself, so I won’t rehash the whole thing, but one of the points I made was that given the representation of Italian credits in € IG and € HY, and given the fact that ECB corporate bond purchases have served to prevent the market from pricing in credit ri...

Bitcoin tracking for slight weekly losses despite news of regulatory crackdowns

Bitcoin has held up relatively well this week despite negative headlines about regulatory crackdowns. For analysts with a long-term view, that price action fits with their thesis that increased scrutiny will shake out the bad actors and make the markets healthy enough for institutions to invest. “In the long run this is WILDLY bullish,” Brian Kelly, a CNBC contributor and head of BKCM, said in a note to clients Thursday. “If the DoJ and CFTC feel as though they have ‘cleaned’ up the market, then it paves the way for a U.S. Physically backed Bitcoin ETF, and brings in institutional investors.” Bitcoin briefly hit a six-week low of $7,272 on Thursday morning after Bloomberg reported the U.S. Department of Justice opened a criminal probe into whether trader...

Market Calls Trump’s Auto Tariff Bluff

Donald Trump’s feigned unpredictability has become the most predictable aspect of his administration. The president’s latest gambit is a threat of major tariffs against foreign car manufacturers, after he directed Commerce Secretary Wilbur Ross Wednesday to conduct a Section 232 investigation into whether foreign competition in the auto sector represents a threat to national security risk. The market has shrugged off the news, with Toyota stock falling less than 2% during trading Thursday, and other foreign car makers like BMW, Hyundai, and Daimler have all paired back losses since the announcement Wednesday afternoon. If investors were taking the president seriously, one would expect a much larger reaction, given that Toyota, for instance, sells more cars in North America than even its th...

Bill Miller says higher interest rates always led to a higher stock market the last two decades

Higher interest rates are good for the stock market, noted investor Bill Miller said in call about the first quarter for markets. “Looking at the last 20 years — all cases of higher interest rates have been met with a market that’s gone higher,” Miller said, according to notes from the call published May 15. He managed a fund at Legg Mason that beat the S&P 500 for 15 consecutive years through 2005 before he founded Miller Value Partners in 2016. The opposite mentality has generally factored into daily market moves in recent years. Stocks fell earlier this year as the 10-year Treasury yield climbed toward 3 percent. Even on Wednesday, stocks closed higher after minutes from the latest Fed meeting said the central bank would be comfortable letting inflation temporarily...

Wall Street regulations need a facelift, not a minor Dodd-Frank makeover

Republicans finally managed to roll back some of the Wall Street regulations passed by Congress in the wake of the 2008 financial crisis after years of trying. While it wasn’t a full repeal as some had hoped, it’s the first legislative overhaul since the Dodd-Frank Act became law in 2010. This debate has primarily been framed as a fight over regulation. Democrats generally want more to protect taxpayers and investors from the next crisis; Republicans want less because they argue it stifles economic growth. More from The Conversation: The US economy is in desperate need of a strong dose of fiscal penicillinHow money is destroying the worldRecent stock market sell-off foreshadows a new Great Recession So who’s right? Based on our combined 35 years of experience with securit...

Analyst: Shake Shack Is Doing Well For Itself, But Maybe Just A Little Too Well…Like Seriously, It’s Just Burgers

By m01229 from USA (Shake Shack burger and fries) [CC BY 2.0], via Wikimedia Commons Don’t look now but Shake Shack has been one of the hottest stocks of early 2019, growing 32.72% since the beginning of the year. What’s not to love about Shake Shack? It’s to Steak & Shake what Chik-Fil-A is to KFC, but without the intrinsic homophobia. So it makes you wonder: is Shake Shack doing a little too well for itself? After all, it’s not In N’ Out. Longbow Research suggests that prospective Shake Shack Investors wait till the stock takes a little dip before they buy any shares in the hot stock. Specifically, they downgraded their target purchase price from $54 to $49 after Shake Shack’s stock price eclipsed their original target price. Longbow still remains opportunistic about a potential decl...

New Italian Government Puts Oldest Italian Bank Back On Life Support

Getty Images At the ripe old age of 537, the Banca Monte dei Paschi di Siena fell ill. It had led a good life, from its salad days as the official pawnbroker for the Republic of Siena to its hey day as banker to the Medici. It was, after all, the oldest bank in the world, and all good things must come to an end. And for a while, it certainly looked like things were coming to an end. And then, un miracolo: An Italian taxpayer-backed, German-taxpayer loathed recovery. It seemed as though MPS might live well into its second half-millennium. But the angry Italian taxpayer giveth (unwillingly), and the angry Italian taxpayer taketh away (again). Italy’s anti-establishment Five Star Movement and far-right Northern League said they would “redefine the missions and objective” of the bank, in their...

Fed could be finished hiking rates by 2019, Philadelphia’s Harker says

Interest rate hikes could come to an end for this cycle in 2019, Philadelphia Fed President Patrick Harker said Thursday. One of the more hawkish central bankers when it comes to monetary policy, Harker said he envisions a scenario where the Federal Reserve increases its benchmark overnight rate three times total in 2018 and three more times next year, then stops as the economy hits equilibrium. “I think we’re getting close to neutral,” he told CNBC’s Steve Liesman in a live interview from Dallas. “If we see inflation start to accelerate, then I would be open to a fourth increase this year. But I’d have to see evidence of that first.” The policymaking Federal Open Market Committee, of which Harker is a nonvoting member this year, approved a quarter...