Thursday, January 14, 2016

JPMorgan beats!

JPMorgan beats!

JPMorgan just announced fourth-quarter earnings that beat on the top and bottom lines.
The firm announced earnings per share of $1.32 on revenue of $23.7 billion.
Analysts were expecting adjusted earnings per share of $1.28 on revenue of $23.24 billion, according to Bloomberg.
"We had a good quarter as 2015 came to a close," CEO Jamie Dimon said in a statement.
"The businesses generated strong loan growth and credit quality, except for some stress in energy. The consumer business continues to gather deposits, outpacing the industry. Markets were somewhat quieter, and we saw the impact reflected in the results of our trading and Asset Management businesses."
The firm beat expectations in almost every major division — except equities:
  • Investment-banking revenue came in at $1.47 billion ($1.45 billion expected)
  • Trading revenue was $4.31 billion ($3.72 billion expected)
  • Fixed-income, currencies, and commodities revenue came in at $2.58 billion ($2.48 billion expected)
  • Equities revenue was $1.06 billion ($1.24 billion expected)
The firm also reported record full-year 2015 results, including record net income of $24.4 billion and record earnings per share of $6.00 on revenue of $96.6 billion for the year.
"Looking at performance for the full year, 2015 was another record year for the Firm for net income and EPS, and importantly we exceeded on all of our commitments — balance sheet optimization, capital, GSIB and expense," Dimon continued.
"On operating leverage, we delivered core efficiencies while continuing to invest in innovation and technology, infrastructure and talent — crucial for protecting the company and customers, and for our growth."
In the same quarter last year, JPMorgan missed on the top and bottom lines, reporting earnings of $1.19 a share ($1.31 expected) on revenue of $23.5 billion ($23.66 billion expected).
Wells Fargo and Citigroup will report fourth-quarter earnings at 8 a.m. on Friday.

Goldman Sachs is reportedly cutting 10% of its giant fixed-income division

Goldman Sachs is reportedly cutting 10% of its giant fixed-income division

Goldman Sachs is preparing to drop up to ten percent of its fixed-income division later this quarter,according to a report from The Wall Street Journal.
The layoffs are expected to take place among Goldman's fixed-income traders and salespeople, and could affect about 250 employees.
The potential cuts represent a larger-than-normal excision at the firm.
Goldman Sachs is famous for shedding the bottom 5% of its total roster annually in March.
The fixed-income business has been challenging over the past year, with credit trading especially hard hit.
A number of banks have made significant cuts to their fixed-income divisions, with Goldman Sachs rival Morgan Stanley cutting 25% of staff in its fixed income division late last year.
Goldman Sachs has typically made small-scale cuts to the division, rather than taking an ax to it. At the Bank of America Banking & Financial Services Conference in November,Goldman's chief financial officer Harvey Schwartz noted that the firm tended to make changes quietly.
"The reason we don't make announcements is because I think that's just what you need to do in this business," Schwartz said.
"I don't think there is any reason to make an announcement. You just have to run the business and if the revenue environment is such that you are in a period of decline, you just need to take to those actions."
At the time, Schwartz said the firm had cut its fixed income headcount by 10% since 2013.
It isn't uncommon for Wall Street banks to cut jobs around the time that bonuses are announced. Goldman Sachs is set to tell staff what they'll receive as a bonus for 2015 next week. 

Indonesia cut its interest rate hours after deadly attacks

Indonesia cut its interest rate hours after deadly attacks

JakartaScreenshot via TV One
The Indonesian central bank cut interest rates 25 basis points to 7.25% in a scheduled meeting just hours after explosions and gunfire erupted in Jakarta.
At least seven people have reportedly been killed after several explosions erupted in central Jakarta. An unknown number of others were injured. 
Indonesian president Joko Widodo said the "situation [is] under control" in a statement given on national TV following the attacks on Thursday.
Bank Indonesia's cut was the first in 11 months. It came after a scheduled meeting and is unlikely to be related to the attacks.
The central bank is trading a weaker currency, which makes dollar denominated debt more expensive to pay back, but also makes for easier monetary conditions and cheaper exports. Thirteen economists out of 23 surveyed by Bloomberg expected the cut.

Bank of England holds rates for 82nd straight month

Bank of England holds rates for 82nd straight month

Mark CarneyREUTERS/Guadalupe PardoBank of England's Governor Mark Carney gestures during the "Debate on the Global Economy" session during the 2015 IMF/World Bank Annual Meetings in Lima, Peru, October 8, 2015.
The Bank of England has voted to keep interest rates on hold once again in its January meeting — as analysts had expected.
The BoE has been on hold as far as interest rates are concerned since March 2009, when the monetary policy committee cut Bank Rate to 0.5%.
Once again, a single member of the nine-person MPC voted for a 0.25 percentage point rate hike, and eight voted to keep the rate where it is for now.
While MPC Member Ian McCafferty voted for a 0.25% rise, the BoE cited deflationary risks from the falling oil price in its justification for keeping rates at near-zero levels.
Here's the key quote from the BoE:
Twelve-month CPI inflation rose to 0.1% in November and is likely to rise modestly further in the coming months as some of the large falls in energy and food prices a year earlier drop out of the annual comparison.  But the 40% decline in dollar oil prices means that the increase in inflation is now expected to be slightly more gradual in the near term than forecast in the Committee’s November Inflation Report projections.
The news didn't move the pound much against the dollar:
GBPInvesting.com

Wednesday, January 13, 2016

Shanghai, Hong Kong plunge after Wall St losses

Shanghai, Hong Kong plunge after Wall St losses

[HONG KONG] Shanghai stocks extended their sharp losses on worries over the economy on Thursday, in line with another regional sell-off after New York's three main indexes were hammered again.
The benchmark Shanghai Composite Index lost 2.56 per cent, or 75.55 points, to 2,874.05, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, tumbled 3.27 per cent, or 58.65 points, to 1,732.53.
And in Hong Kong, the Hang Seng Index sank 1.79 per cent, or 355.96 points, to 19,578.92.
AFP

North Korea nuclear reactor not fully operational: US think tank

North Korea nuclear reactor not fully operational: US think tank

[SEOUL] Recent satellite images suggest the nuclear reactor seen as North Korea's main source of weapons-grade plutonium is still not operating at full capacity, a US think tank said Thursday.
North Korea mothballed the Yongbyon reactor in 2007 under an aid-for-disarmament accord, but began renovating it after its third nuclear test in 2013.
When fully operational, the reactor is capable of producing around 6kg of plutonium a year - enough for one nuclear bomb, experts say.
Analysing satellite imagery from late 2014 to the end of 2015, the Washington-based Institute for Science and International Security (ISIS) concluded the reactor has been operating intermittently or at low power throughout the period.
Using tell-tale operational markers, including steam emissions and hot water discharges, the ISIS experts discerned a pattern of limited operations for a few weeks, followed by an apparent shutdown.
"The reasons for this type of operation are unknown," the institute said.
Its findings contradict a North Korean statement in September last year that all facilities at the Yongbyon nuclear complex were working normally.
The ISIS experts did detect signs that a gas centrifuge plant for enriching uranium was operational, given snow melt on the roofs of the plant's main buildings.
Activity at Yongbyon is closely monitored for any sign of reprocessing activity.
At some point North Korea is expected to shut down the reactor, discharge the spent fuel, and chemically process it in a nearby radiochemical laboratory to extract weapons-grade plutonium.
North Korea has carried out four nuclear tests since 2006, the most recent being last week when it announced it had detonated its first hydrogen bomb.
Experts have disputed the H-bomb claim, saying the yield from the test was far too low for a full-fledged thermonuclear device.
AFP

South Korea calls for 'bone-numbing' sanctions on North for nuclear test

South Korea calls for 'bone-numbing' sanctions on North for nuclear test

[SEOUL] South Korea warned North Korea on Wednesday that the United States and its allies were working on sanctions to inflict "bone-numbing pain" after its latest nuclear test, and urged China to do its part to rein in its isolated neighbour.
With tension high on the border after the North's fourth nuclear test on Wednesday last week, South Korean forces fired shots towards what Yonhap News Agency said was a suspected North Korean drone.
It returned to the North after the shots, South Korean military officials told Reuters.
The North's nuclear test angered both China and the United States and again raised questions about what can be done to stop its development of nuclear weapons.
The World Economic Forum withdrew its invitation for North Korea's foreign minister to attend its annual Davos meeting because of the nuclear test. It was to have been the country's first participation in the event in 18 years.
The US House of Representatives voted nearly unanimously on Tuesday to pass legislation to broaden sanctions on the North.
But apparently unperturbed by the prospect of further international isolation, North Korean leader Kim Jong Un called for an expansion of the size and power of his country's nuclear arsenal, urging the "detonation of more powerful H-bombs", the North's state media reported.
North Korea said last week it had tested a powerful hydrogen bomb but the United States and various experts doubt that, as the blast was roughly the same size as that from its previous test, of an atomic bomb, in 2013.
South Korean President Park Geun-hye said more"provocations" by the North including "cyber-terrorism" were possible and new sanctions should be tougher than previous ones. She did not give specifics. "We are cooperating closely with the United States and allies to come up with effective sanctions that will make North Korea feel bone-numbing pain, not only at the Security Council but also bilaterally and multilaterally," she said in a speech.
Ms Park said South Korea and China were discussing a UN Security Council resolution on North Korea, noting that China had stated repeatedly that it would not tolerate its nuclear programme.
China is North Korea's main ally and trade partner but it opposes its bombs, while Beijing's ties with South Korea have grown closer in recent years. "I am certain that China is very well aware if such a strong will isn't followed by necessary steps, we will not be able to stop the North's fifth and sixth nuclear tests and we cannot guarantee true peace and stability," Ms Park said. "I believe the Chinese government will not allow the situation on the Korean peninsula to deteriorate further." Sung Kim, US special representative for North Korea policy, met with his South Korean and Japanese counterparts in Seoul on Wednesday and said the three agreed that a "meaningful"new sanctions resolution was needed from the Security Council. "I hope the Chinese authorities agree with us that we simply cannot take a business as usual approach to this latest provocation. We will be working very closely with them to come up with a meaningful resolution," he said.
In Washington, White House deputy national security adviser Ben Rhodes said China could and should put more pressure on North Korea. "We understand their concern about instability on the Korean peninsula, but the fact of the matter is that the current status quo is destabilising where you have nuclear tests," he told a news briefing.
Mr Rhodes said it was important the United States and its allies developed capabilities to respond and referred to Sunday's US B-52 bomber flight over South Korea, missile defence and military cooperation with both South Korea and Japan.
Mr Rhodes also said that President Barack Obama chose not to mention North Korea in his State of the Union address on Tuesday as he did not want to give Kim Jong Un the attention. "He likes attention and probably would like nothing more than the president to spend a lot of time to talk about it in the State of the Union," Mr Rhodes said. "We didn't particularly feel compelled to give him that attention."
China rejects complaints it is not doing enough on North Korea. In Beijing, Foreign Ministry spokesman Hong Lei said China's efforts towards a denuclearised Korean peninsula would continue. "This is in everyone's interests and is everyone's responsibility, including China and South Korea," he said.
The US House sanctions measure passed by 418-2 and Senate leaders expect to consider a similar bill shortly. The House bill had been introduced in 2015 but was brought up for a vote only after North Korea's latest test. "(The bill) uses targeted financial pressure to isolate Kim Jong Un and his top officials from the assets they maintain in foreign banks, and from the hard currency that sustains their rule," said Republican Representative Ed Royce, chairman of the House Foreign Affairs Committee and an author of the measure.
To become law, it must also pass the U.S. Senate and be signed by Obama.
The 28,500 US troops in South Korea have been put on high alert as a noisy propaganda battle is played out across the heavily fortified border with the North.
South Korea, still technically at war with the North since their 1950-53 conflict ended in a truce, not a treaty, has for days been blaring propaganda through loudspeakers across the border.
South Korea's military said it had found anti-South leaflets in the Seoul area, which it suspects were dropped from North Korean hot air balloons.
South Korean financial regulators met computer security officials at 16 banks and financial institutions and urged vigilance in the face of possible cyberattacks by North Korea, although none has been detected.
REUTERS

China tourists splurge US$229b in 2015, Europe most popular outside of Asia: GfK

China tourists splurge US$229b in 2015, Europe most popular outside of Asia: GfK

By

CHINA produced 109 million outbound tourists in 2015, and they come with whopping purchasing power, spending some US$229 billion in retail therapy.
Market research group GfK's latest analyses of the Chinese market, released on Thursday, consolidate China's position as one of the top global sources of tourists, in terms of both number of trips and money spent during international travel.
Hong Kong, which has been the preferred destination for China's outbound tourists up until 2013, is increasingly slighted for other destinations that offer historical and cultural experiences, as well as shopping.
By the start of November 2015, the top five favourite destinations for Chinese travellers (counting air and overnight visits), were South Korea (representing a traveller increase of 112 per cent since 2011), Thailand (up 263 per cent), Hong Kong (up 37 per cent), Japan (up 157 per cent) and Taiwan (up 54 per cent).




Europe remains the most popular destination for Chinese travelling outside of Asia. This is followed by North America (up 151 per cent) and the Middle East (up 177 per cent). Africa remains the destination least visited by Chinese tourists. But GfK notes that there are signs that this could be changing, as visits have risen by 306 per cent rise since 2011.
According to GfK, half (50 per cent) of China's outbound travellers are aged 15-29 years old - the "millennials" group - while over a third (37 per cent) are aged 30-44 and 10 per cent are 45-59.
"The sheer size of the millennial group within China's travellers makes this a commercially attractive target audience for those destinations who are looking to draw in Chinese tourists. This attraction is increased by the fact that two-thirds (66 per cent) of Chinese millennials belong to the high income bracket," GfK said, adding that this group should be seen as independent travellers who will respond to opportunities to plan personalised trips.

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