Credit Warning Signs, Low Interest Rates and Market Regulation

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Editor, Date: Herodote63, 30 juil. 2019
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URL of the actual page: https://www.cnbc.com/2019/07/30/consumer-confidence-rebounds-in-july-to-135point7-vs-125-expected.html
Title of the Page: Consumer Confidence rebounds in July to 135.7, the highest level since November
Editor, Date: CNBC, JUL 30 2019
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- American consumer confidence rebounded this month to the highest level since November after drooping in June.

- The Conference Board, a business research group, said Tuesday that its consumer confidence index rose to 135.7 in July from 124.3 in June.

- The bounce back from last month’s drop was much stronger than economists expected.

American consumer confidence rebounded this month to the highest level since November after drooping in June.

The Conference Board, a business research group, said Tuesday that its consumer confidence index rose to 135.7 in July from 124.3 in June. The bounce back from last month’s drop was much stronger than economists expected.

URL of the actual page: https://www.cnbc.com/video/2019/07/19/american-express-earnings-announcement-eps-revenue-squawk-box.html?&qsearchterm=american%20express%20earnings
Title of the Page: American Express Q2 earnings: 2.07 Dollar a share, vs 2.04 Dollar expected
Editor, Date: CNBC, Fri, Jul 19 2019
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CNBC’s “Squawk Box” reports on American Express’ second-quarter earnings. The company reported an EPS beat while revenue was in-line with expectations.

URL of the actual page: https://www.cnbc.com/video/2019/07/16/wells-fargo-earnings-1point30-per-share-vs-1point15-eps-expected.html?&qsearchterm=wells%20fargo%20earnings
Title of the Page: Wells Fargo earnings: 1.30 Dollar per share, vs 1.15 Dollar EPS expected
Editor, Date: CNBC, JUL 16 2019
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CNBC’s “Squawk Box” break down Wells Fargo’s second quarter earnings results.

URL of the actual page: https://www.cnbc.com/2019/05/04/reuters-america-buffett-said-berkshire-hathaway-would-probably-under-perform-if-a-very-strong-bull-market-in-stocks-were-to-start.html?&qsearchterm=berkshire
Title of the Page: reuters america buffett said berkshire hathaway would probably under perform if a very strong bull market in stocks were to start
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Waren Buffett berkshire hathaway would probably under perform if a very strong bull market in stocks were to start 2019

URL of the actual page: https://www.cnbc.com/video/2019/07/17/watch-three-experts-breaking-down-bank-of-americas-q2-earnings.html?&qsearchterm=bank%20of%20america%20earnings
Title of the Page: Watch three experts break down Bank of America’s Q2 earnings
Editor, Date: CNBC, JUL 17 2019
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Analysts expected Bank of America to report profit of 71 cents a share, a 12.3 percent increase from a year earlier, according to Refinitiv. CNBC’s “Squawk Box” reports on Bank of America’s second-quarter earnings results. “Shark Tank” Host Kevin O’Leary, Peter Boockvar of Bleakley Advisory Group and CNBC’s Mike Santoli join with their analysis.

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Title of the Page: CITIGROUP earnings report of Q2 2019
Editor, Date: Investors dot com July 2019
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CITIGROUP earnings report of Q2 2019, no longer avilable online.

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Title of the Page: JP Morgan Chase beats on top and bottom lines
Editor, Date: CNBC, JUL 16 2019
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Marty Mosby, director of bank strategies at Vining Sparks, and CNBC’s Mike Santoli, join “Squawk Box” to give their initial reactions to J.P. Morgan Chase’s second quarter earnings.

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Title of the Page: Goldman Sachs earnings blow past Wall Street on strong investment banking, equity trading
Editor, Date: CNBC, JUL 16 2019
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Goldman Sachs reports earnings of 5.81 Dollar per share vs. 4.89 DOllar per share, forecast by Refinitiv.

It also beats Wall Street’s expectations on revenue, with 9.46 Dollar billion in the second quarter.
The bank reports better-than-expected total investment banking revenue, with 1.86 billion Dollar for the quarter.

Equities revenue also beat, coming in at 2.01 billion Dollar in the second quarter. But revenues for fixed income, currency and commodities were slightly below projections.

URL of the actual page: https://twitter.com/herodote63/status/1156514426129911808?ref_src=twsrc%5Etfw
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Editor, Date: Herodote63, 31 juil. 2019
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URL of the actual page: https://www.cnbc.com/2019/07/15/reuters-america-us-stocks-sp-ends-near-flat-as-citigroup-results-sink-banks-nasdaq-hits-new-high.html?&qsearchterm=citigroup%20earnings
Title of the Page: Reuters: us stocks sp ends near flat as citigroup results sink banks nasdaq hits new high
Editor, Date: CNBC, July 2019
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Editor, Date: Herodote63, 30 juil. 2019
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Editor, Date: Yahoo, july 2019
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URL of the actual page: https://www.cnbc.com/2019/07/31/companies-without-credit-ratings-flag-warnings-for-global-economy-sp.html
Title of the Page: ‘Hidden’ debtors may be signaling trouble in the global economy
Editor, Date: Herodote63, 30 juil. 2019
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- With the global economy slowing down, an analysis by S&P Global Market Intelligence finds unrated borrowers showing an increasing risk of defaults.

- Small companies without credit ratings are likely to be the first victims in an economic downturn, says Michelle Cheong of S&P Global Market Intelligence.

- She says unrated firms in China, the U.K. and the technology sector in Asia Pacific are among the most at risk of a sudden spike in defaults.

URL of the actual page: https://www.cnbc.com/2019/07/30/warren-buffett-this-is-the-no-1-mistake-parents-make-when-teaching-kids-about-money.html
Title of the Page: Warren Buffett: This is the No. 1 mistake parents make when teaching kids about money
Editor, Date: CNBC, Make it, Jul 30 2019
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If there’s one person who understands the importance of teaching kids about financial responsibility, it’s Warren Buffett.

Before he became CEO of Berkshire Hathaway, the legendary investor started a handful of small businesses — starting at age six, when he purchased a six-pack of Coke for 25 cents and sold each can for a nickel. He also sold magazines and gum from door to door.

“My dad was my greatest inspiration,” Buffett said in an interview with CNBC back in 2013. “What I learned at an early age from him was to have the right habits early. Savings was an important lesson he taught me.”

When asked what he thinks is the biggest mistake parents make when teaching their kids about money, the billionaire said, “Sometimes parents wait until their kids are in their teens before they start talking about managing money — when they could be starting when their kids are in preschool.”

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Editor, Date: Herodote63, 31 juil. 2019
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URL of the actual page: https://news.yahoo.com/big-banks-q2-earnings-synopsis-154503936.html?guccounter=1
Title of the Page: Big Banks' Q2 Earnings Synopsis: Near-Term View in the Balance
Editor, Date: Tahoo news, July 24, 2019
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Wall Street banks that mainly serve U.S. consumers have mostly stolen the show in the June quarter, outpacing those with lesser exposure to this business. However, the largest banks now expect the probable Fed rate cut to trim their lending margins. In fact, a deeper or multiple rate cuts might squeeze margins to a greater extent. Notably, some of the biggest banks have already slashed their deposit rates, clouding the near-term outlook.

Nevertheless, a resilient overall financial system and announcement of fresh buybacks and dividend hikes will lend support to bank stocks.

Consumer Lending Aids Big Banks, Investment Banking Hurts

Till recently, American consumers were quite optimistic, powered by increasing wages, low level of unemployment and favorable interest rates. The Fed’s decision to hold rates steady prompted domestic consumers to boost usage of credit cards more than debit cards. Notably, with the fall in 30-year average fixed mortgage rates below 4 percent since 2017, the origination of mortgages at banks increased significantly through the June quarter of 2019.

URL of the actual page: https://www.cnbc.com/2019/07/29/buybacks-companies-increasingly-using-debt-to-repurchase-stocks.html?&qsearchterm=shares%20buybacks%20using%20debt
Title of the Page: Companies are ramping up share buybacks, and they’re increasingly using debt to do so
Editor, Date: CNBC, JUL 29 2019
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- Share buybacks are expected to approach 1 trillion Dollar this year, according to Goldman Sachs.

- Funding is coming from a record drawdown in cash as well as a rise in gross debt and leverage.

- Buybacks have exceeded free cash flow for the first time since the financial crisis.

URL of the actual page: https://www.reuters.com/article/us-imf-outlook/imf-lowers-global-growth-forecasts-amid-trade-brexit-uncertainties-idUKKCN1UI1NS?edition-redirect=uk
Title of the Page: IMF lowers global growth forecasts amid trade, Brexit uncertainties
Editor, Date: Reuters, JULY 23, 2019
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The International Monetary Fund on Tuesday cut its forecast for global growth this year and next, warning that further U.S.-China tariffs or a disorderly exit for Britain from the European union could further slow growth, weaken investment and disrupt supply chains.

The IMF said downside risks had intensified and it now expected global economic growth of 3.2 percent in 2019 and 3.5 percent in 2020, a drop of 0.1 percentage point for both years from its April forecast, and its fourth downgrade since October.

Economic data so far this year and softening inflation pointed to weaker-than-expected activity, the global lender said, with trade and technology tensions and mounting disinflationary pressures posing future risks.

The IMF slashed its forecast for growth in global trade by 0.9 percentage point to 2.5 percent in 2019. Trade should rebound and grow by 3.7 percent in 2020, about 0.2 percentage point less than previously forecast.

URL of the actual page: https://www.reuters.com/article/us-britain-eu-banks-idUSKCN1UJ1J4
Title of the Page: Doubts mount over UK finance sector's access to EU after Brexit
Editor, Date: Reuter, JULY 24, 2019
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Direct access for Britain’s financial sector to the European Union after Brexit is increasingly under threat as political will for an industry deal fades and the bloc toughens requirements for recognizing other countries’ financial rules.

The EU is the City’s biggest customer, with financial services exports worth 26 billion pounds in 2017. Ensuring the UK’s large financial industry could still operate across the bloc from its home base was one of the central issues during early divorce talks after Britain voted to leave the EU in June 2016.

But as the EU and Britain quashed the industry’s hopes of largely unfettered access to the bloc, banks began moving around a trillion pounds of assets from London to new EU hubs, while trading worth around 240 billion euros a day in euro zone government bonds has moved to Milan and Amsterdam.

Despite the preparations, maintaining direct access would mean the sector could continue to leverage cross-border efficiencies of scale and avoid passing on the costs to customers of maintaining two hubs, one in Britain, the other in the EU.

URL of the actual page: https://www.express.co.uk/news/politics/1149763/nigel-farage-news-brexit-latest-eu-paris-frankfurt-brussels-switzerland
Title of the Page: Farage’s warning to the EU: UK won’t tolerate EU plot to freeze out London’s financial hub
Editor, Date: Express news, UK, Jul 5, 2019
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NIGEL FARAGE has warned the UK will not tolerate the EU attempting to freeze out London’s unrivalled financial hub out of the bloc’s market post-Brexit.

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Editor, Date: Herodote63, 31 juil. 2019
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URL of the actual page: https://www.cnbc.com/2019/07/29/eu-to-strip-canada-brazil-singapore-of-market-access-rights-ft.html
Title of the Page: The EU is reportedly stripping 5 countries of some market access rights — that may impact the UK after Brexit
Editor, Date: CNBC, JUL 29 2019
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- The move will see the European Commission blocking Argentina, Australia, Brazil, Canada and Singapore from accessing parts of the European Union’s financial market, according to the Financial Times.

- The five countries are deemed as no longer regulating credit rating agencies as rigorously as the bloc — thereby removing them from a position which made it possible for European banks to rely on those ratings, reported the Financial Times,


The European Commission will be blocking five countries from accessing parts of the European Union’s financial markets — in a move that could hit the United Kingdom after it leaves the bloc, according to a Financial Times report on Sunday.

The decision will see the Commission removing certain market access rights from Argentina, Australia, Brazil, Canada and Singapore, the FT reported.

The bloc grants financial-market access to non-EU lenders, investment firms, clearing houses or credit rating agencies in its so-called “equivalence” system, as long as it considers their home rules to be in line with the EU’s.

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URL of the actual page: https://www.investopedia.com/ask/answers/041015/how-do-interest-rate-changes-affect-profitability-banking-sector.asp
Title of the Page: How Interest Rate Changes Affect the Profitability of Banking
Editor, Date: Investopedia, Jun 25, 2019
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The banking sector's profitability increases with interest rate hikes. Institutions in the banking sector, such as retail banks, commercial banks, investment banks, insurance companies, and brokerages have massive cash holdings due to customer balances and business activities.

Increases in the interest rate directly increase the yield on this cash, and the proceeds go directly to earnings. An analogous situation is when the price of oil rises for oil drillers. The benefit of higher interest rates is most notable for brokerages, commercial banks, and regional banks.

KEY TAKEAWAYS

Interest rates and bank profitability are connected, with banks benefiting from higher interest rates.

When interest rates are higher, banks make more money, by taking advantage of the difference between the interest banks pay to customers and the interest the bank can earn by investing.

A bank might pay its customers a full percentage point less than it earns through investing in short-term interest rates.

Additionally, higher interest rates tend to reflect a period of greater economic growth, with the Federal Reserve raising rates to slow expansion.

A stronger economy means more consumers seek loans, helping banks as they benefit from the difference between the interest they charge investors for the loan and the amount they earn by investing that money.

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URL of the actual page: https://www.investopedia.com/terms/l/low-interest-rate-environment.asp
Title of the Page: Low Interest Rate Environment Definition
Editor, Date: Investopedia, updated Nov 2020
Description of the Page :

What Is a Low Interest Rate Environment?

A low interest rate environment occurs when the risk-free rate of interest, typically set by a central bank, is lower than the historic average for a prolonged period of time. In the United States, the risk-free rate is generally defined by the interest rate on Treasury securities.

Zero interest rates and negative interest rates are two extreme examples of low interest rate environments.

KEY TAKEAWAYS

- Low interest rate environments occur when the risk-free rate is set lower than the historical average.

- Much of the world entered a low interest rate environment following the 2008-09 financial crisis.
Low interest rate environments tend to benefit borrowers at the expense of lenders and savers.