The numbers: Bank of America reported that it had earned slightly less than analysts expected during the first quarter of 2013—$0.20 instead of the $0.22 Wall Street was hoping for. Its revenue for the quarter exceeded expectations very slightly, up to $23.7 billion from $22.5 billion a year ago. Net income rose to $2.6 billion from $653 million in the first quarter of 2012.
The numbers: Goldman Sachs reported better-than-expected earnings and revenue for the quarter (pdf). The bank earned $4.29 per share and saw revenues of $10.1 billion.
Ever wonder where the real money is? In hedge funds, of course!
The numbers: Citigroup beat analyst expectations, reporting earnings per share of $1.23 (as opposed to estimates of $1.18) and revenue of $20.5 billion (versus predictions of $20.1 billion). Net income rose from $1.2 billion in the fourth quarter of 2012 to $3.8 billion in the first quarter of 2013.
The numbers: Wells Fargo’s earnings (pdf) beat analyst expectations for the first quarter of 2013, with earnings per share of $0.92 (versus a predicted $0.88) and revenue of $21.3 billion (versus $21.6 billion estimate). Net income rose to $5.2 billion from $4.2 billion in the first quarter of 2012. (Wells is the largest US bank by stock market capitalization.)
The numbers: JP Morgan Chase reported earnings per share of $1.59 (pdf), much higher than analysts had expected ($1.39), and revenue of $25.8 billion, slightly lower than analyst estimates. Net income rose from $4.9 billion a year ago to $6.5 billion. The bank’s board also plans to raise dividend payments from $0.30 to $0.38.
China’s economic relationship with Africa is growing at a breakneck pace. In 2012, the volume of trade—imports plus exports—reached $198.5 billion. Standard Chartered analyst Sarah Baynton-Glen estimates that trade volume could amount to $385 billion by 2015—nearly double its current level—if it continues to grow on its current trend.
Like many multinationals, Spain’s Iberdrola, an electrical utility, has been forced by the euro crisis to re-examine its priorities. Having grown five-fold over the last decade, it’s now halting that geographical expansion and refocusing. Iberdrola’s CEO, José Ignacio Sánchez Galán, told Quartz today that the firm is on track to get rid of most of its operations outside the United States, the United Kingdom, Brazil, Mexico, and Spain. Overall, it wants to raise an estimated €2 billion ($2.6 billion).
The world’s third-largest port is entering its thirteenth day of a major traffic jam. Striking dockworkers have effectively shut down parts of the dock controlled by Hongkong International Terminals (HIT), demanding a pay increase of approximately 25% that they argue would allow their pay to keep up with inflation. Currently paid HK$50 ($6.44) per hour, they’re demanding HK$62.50.
For all you bitcoin nerds predicting the surge of the online currency: Paul Volcker doesn’t care.
Late Friday (April 6), the Portuguese Constitutional Court struck down provisions that would have cut public-employee wages, state pensions, unemployment benefits, and disability pay. Those austerity measures–which had already been passed by lawmakers–were terms of the country’s ongoing bailout with the European Union and the IMF.
The just-leaked draft of the Brown-Vitter legislation—which would peel back the Basel III international banking regulations but hike capital requirements at the US’s biggest banks—would be the worst thing that could happen for international cooperation between regulators.
Ten years ago, hedge funds were relatively unknown entities. Often they were made up of Wall Street vets who had tired of the corporate culture at big investment banks and saw opportunities to make more money by going out on their own. They prized the freedom and flexibility of a financial start-up over the relative stuffiness of big banks.
Today Matthew Taylor, a former Goldman Sachs vice-president who traded equity derivatives, pleaded guilty to concealing a massive trading position that lost the bank $118.4 million in late 2007. He was able to amass an $8.3 billion long position before anyone else noticed in what are called “e-mini futures,” which bet that the S&P 500 will rise in the future. Unfortunately, that didn’t really work out for him, and now he’s probably off to jail.
The European Central Bank (ECB) decided this morning to keep rates on hold at 0.75% and chose not to introduce any non-traditional measures to stimulate lending to small businesses, disappointing analysts who had hoped for monetary relief for those engines of the economy.
Wall Street is aflutter with chatter that the European Central Bank (ECB) could adopt new measures to help small- and medium-sized enterprises (SMEs) access cheaper funding. As we pointed out last month, small businesses have been the real losers of the euro crisis. Italian and Spanish banks are increasingly afraid to lend because more and more of their customers aren’t paying back their loans, and regulations forcing banks to hold on to more capital aren’t helping matters.
The Cyprus banking debacle may be stirring up old fears about the spread of one small country’s financial crisis to the rest of the euro zone—but Italy’s finances could prove far more worrisome.
The rise of bitcoin, an electronic currency traded on an online exchange, has generated a media frenzy. Once scoffed at, its value has risen by 631% (denominated in dollars) since the start of 2013.
Today, Canada launched a new immigration program meant to draw entrepreneurial talent to the country. Canada hopes that it can attract businesspeople to start new companies in Canada and invest in Canadian ventures by dangling the promise of permanent residency in one of the wealthiest and easiest places to do business in the world.
No, don’t read those confusing earnings releases. In fact, don’t even listen to the results of those stress tests. There’s a better reason to believe banks and insurance companies are returning to health in the US: they’re buying more office furniture.
The Democratic Party’s Pier Luigi Bersani told outgoing Italian President Giorgio Napolitano that he was unable to win support from Silvio Berlusconi’s center-right People of Freedom Party, nor Beppe Grillo’s anti-establishment Five Star Movement, Bloomberg reports. This means he was unable to form a majority government.
This item has been corrected.
“Only an insane person would want to govern this country, which is in a mess and faces a difficult year ahead,” said Pier Luigi Bersani today, throwing up his hands. That—along with continuing concerns about Cyprus, where banks will open tomorrow after nearly two weeks of shutdown—frightened the markets. Yields on Italian bonds rose 16 basis points. And with good reason.
The Verge’s Matt Stroud and Joseph L. Flatley just published a long, in-depth look at Herbalife, the company that has been at the center of a virulent debate between hedge fund managers for the last few months. And if the story is true, then the company’s stock should be tanking. (It isn’t…yet.)
