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Brief: European Central Bank Governing Council member Francois Villeroy de Galhau said policy makers should take into account more favorable financing conditions in the region when they decide on the pace of emergency bond-buying next week, hinting a slowdown may be in the cards. Any changes in the program dubbed PEPP would not amount to tapering like that announced by U.S. Federal Reserve Chair Jerome Powell on Friday, according to Villeroy, who is also the governor of the Bank of France. Yet the ECB should be coherent with the principle that has led it to purchase assets at a significantly higher pace since March to ensure conditions supported a recovery in the euro area. “On monthly volumes, we are looking at the favorable financing conditions, and we should underline that they are more favorable than at our June meeting,” Villeroy said on BFM Business radio. “We have to decide the monthly volumes for the fourth quarter.”
Brief: The stock market rally may be getting “a little tired” but it has more than enough fuel to continue, says veteran strategist Robert Doll. The Standard & Poor’s 500 Index is up more than 20% this year and has rallied more than 90% since a plunge near the beginning of the Covid-19 pandemic in March 2020. Some investors are concerned that such a high valuation may not be sustainable, with the delta variant still hindering growth in some businesses. A “still good” economy means that stocks will “generally go up,” Doll, chief investment officer at Crossmark Global Investments Inc., said in an interview on Bloomberg TV’s Surveillance on Monday. “A good economy means good earnings so the path of least resistance has been and likely will continue to be to the upside.”
Brief: When stay-at-home favorite Zoom reports quarterly results on Monday, Wall Street will look for details on how the video conferencing platform plans to attract more users as its meteoric growth brakes to its slowest rate since going public. Zoom's revenue growth has been decelerating as the economy slowly reopens, users complain of "Zoom-fatigue" and as vaccinated people return to school and offices. Wall Street analysts expect revenue to grow only 49% in the to-be-reported quarter, compared with multiple-fold growth rates in the past year. Zoom raked in millions of new users as the pandemic forced more people to work, study and communicate with friends and family remotely. The company is now looking to win bigger contracts from businesses, an area dominated by rivals like Cisco, Microsoft's Teams and Salesforce's Slack."Long term, we expect Zoom will grow into a broader enterprise communication and collaboration platform," said Rishi Jaluria, RBC Capital Markets analyst.
Brief: Shares in Asia-Pacific mostly rose on Monday trade, with Australian stocks recovering from an earlier slip as Covid cases in the country spike. In Japan, the Nikkei 225 advanced 0.54% to close at 27,789.29 while the Topix index gained 1.11% to 1,950.14. South Korea’s Kospi ended the trading day up 0.33% at 3,144.19. Mainland Chinese stocks were mixed on the day as the Shanghai composite rose 0.17% to 3,528.15, while the Shenzhen component dipped fractionally to 14,423.37. Hong Kong’s Hang Seng index closed 0.52% higher at 25,539.54. The S&P/ASX 200 in Australia closed 0.22% higher at 7,504.50. The country’s most populous state New South Wales had reported on Monday a record one-day rise in new Covid-19 infections, according to Reuters. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.91%. Investors in the region looked ahead to the release of earnings from Chinese food delivery giant Meituan on Monday.
Brief: Despite the seemingly endless supply of brainpower and cutting-edge technology that’s put to work in financial markets, at times it feels as if nobody knows anything. That’s perhaps the hardest-to-digest lesson learned—or at least reinforced—from the past year and a half, during which the U.S. stock market doubled at the fastest pace since 1932: The accrued wisdom of Wall Street can be a swiftly depreciating asset. “If someone would have told me in March of last year, when COVID was first rearing its ugly head, that 18 months later we would have case counts that are as high—if not higher—than they were on that day, but that the market would have doubled over that 18-month period, I would have laughed at them,” says Steve Chiavarone, a portfolio manager and head of multi-asset solutions at Federated Hermes Inc.
Brief: While the financial world waits for the Federal Reserve to start reversing its ultra-loose policy stance, recent moves by a clutch of other central banks signal the days of pandemic-era accommodation are already numbered even as COVID-19 continues to impede smooth economic recoveries around the world. South Korea's central bank on Thursday raised its benchmark interest rate by a quarter of a percentage point to blunt rising financial stability risks posed by a surge in household debt, becoming the first major monetary authority in Asia to do so since the coronavirus broadsided the global economy 18 months ago.Even before the rate hike in South Korea, though, central banks in Latin America and eastern and central Europe had begun lifting interest rates this year to beat back inflation that is building on the back of currency fluctuations, global supply chain bottlenecks and regional labor shortages.
Brief: The Federal Reserve continues on its path towards tapering its quantitative easing programme, but rising uncertainty resulting from the Delta variant has stifled economic confidence. Speaking at the Jackson Hole symposium, Fed chair Jerome Powell said the strong monetary policy employed over the past 18 months had led to a "vigorous but uneven recovery", one which stands as "historically anomalous". He referenced the July meeting of the Fed, in which he and his fellow bankers suggested the tapering of its QE programme "could be appropriate", however despite continued progress towards maximum employment, the uncertainty of the Delta variant had left "much ground to cover". Powell highlighted lessons learned from the period of the 1950-80s in which stabilisation policy enacted too soon in response to transitory inflation had created a negative effect as evidence for the current policy.
Brief: U.S. consumer sentiment remained weak in late August amid ongoing concerns over inflation and the coronavirus pandemic. The University of Michigan’s final sentiment index fell to a near-decade low of 70.3 during the month from 81.2 in July, data released Friday showed. The figure was in line with the preliminary reading and just below the median estimate of 70.8 in a Bloomberg survey of economists. “Consumers’ extreme reactions were due to the surging Delta variant, higher inflation, slower wage growth, and smaller declines in unemployment,” Richard Curtin, director of the survey, said in a statement. “The extraordinary falloff in sentiment also reflects an emotional response, from dashed hopes that the pandemic would soon end and lives could return to normal without the re-imposition of strict Covid regulations,” he said.
Brief: Some two dozen Metro Bank Plc office staff got an early taste of what hybrid working will look like this week as they trialled their firm’s new approach to office life. Hovering outside the lender’s Moorgate branch in the City of London until it opened at 8:30 a.m., colleagues on the bank’s financial crime team greeted each other in person on Thursday after a year and a half of remote work. Walking into the branch, they turned left and passed through a glass gate before descending into a newly opened basement office below the store.The new space is part of a sweeping overhaul of the bank’s estate as the firm adopts a hybrid work model. It has vacated its standalone office building and redeveloped 78 of its branches to create office space above -- and in some cases below -- its branches. The bank, which employs about 3,000 office workers, has 1,100 desks under the new hybrid system. From Sept. 13, teams will have access to offices via a bookings system that allows staff to book a desk in their neighborhood up to six weeks in advance.
Brief: Emerging Markets (EM) hedge funds, led by funds investing in India, Russia, China, and the Middle East, extended strong gains through mid-year 2021 as EM hedge fund capital eclipsed another record, with performance again topping gains in EM regional equity markets and complemented by volatile cryptocurrencies. The HFRI Emerging Markets (Total) Index has returned +8.1 per cent YTD 2021 through July, led by the HFRI Emerging Markets: India Index, which surged +33.3 per cent, while the HFRI Emerging Markets: Russia/Eastern Europe Index vaulted +16.3 per cent YTD, as reported today with the releases of the HFR Asian Hedge Fund Industry Report and the HFR Emerging Markets Hedge Fund Industry Report from HFR. The investable HFRI 500 Fund Weighted Composite Index, which includes funds across all regions in both Emerging and Developed markets, has gained +8.8 per cent YTD 2021 through July.
Brief: Even in the 19th century, workers were beginning to resent the grind of office life. “You don’t know how wearisome it is to breathe the air of four pent walls without relief, day after day,” British essayist Charles Lamb wrote in a letter to poet William Wordsworth back in 1822, railing against his toil in the East India’s Company’s office in Leadenhall Street, London.For the last 17 months, however, Lamb’s modern successors have mostly worked from home, liberated from what he termed “official confinement.” Today’s white-collar staff are living through a radical transformation of professional life, one economists say is already beginning to jump-start economic productivity and accelerate innovation. The pandemic has weakened the gravitational pull of city centers, with new forces now reshaping knowledge-based economies.
Brief: Investment in technology and data infrastructure sit at the top of asset managers’ priorities as they position themselves to deliver business growth in the recovery from the Covid-19 pandemic. Fifty six per cent say their investment will focus on these areas over the next 12 months and for almost half (47 per cent) on ensuring ESG compliance across their product range. That's according to a new report by Funds Europe – The Future of Investment Operations – for Temenos (SIX: TEMN), the banking software company.The survey of global investment professionals across the asset management sector also reveals Covid-19 has pushed firms to review their IT strategies and transition to the public/hybrid cloud.
Brief: Lending to euro-area consumers resumed its pre-pandemic trend, supporting a recovery that’s increasingly driven by private spending. By contrast, credit growth to companies slowed further in July after spiraling last year when lockdowns paralyzed the economy and eroded income, ECB data showed Thursday. With lending an early indicator for investment, this trend could become a reason for concern if it persists into 2022, according to ING’s Carsten Brzeski.
Brief: Howard Marks, co-founder of distressed debt firm Oaktree Capital Management LLC, says he’s looking to find “hidden gems” in a world where too many buyers are driving returns down. “Ever since the Fed and the Treasury and the world’s central banks rescued the global economy,” and the Fed injected trillions of dollars into markets, investors have became “forced buyers,” Marks said in a video interview Wednesday afternoon. That turned bargain hunting into a “very challenging” activity, he said. Oaktree is one of the largest specialists in distressed debt, with about $37 billion committed to credit and private equity from troubled companies. The Los Angeles-based fund has thrived in times of economic stress, when bonds of companies in danger of defaulting fall to deep discounts.
Brief: After a planned initial public offering blew up spectacularly in 2019, WeWork Inc. was counting on the post-Covid era of flexible working to staunch big cash outflows and gain a fresh start. Its attempt to go public (again) is premised on people now preferring its shared workspaces over traditional corporate offices.But with virus cases surging in key markets like the U.S. and U.K., its recovery isn’t going as well as hoped. Last week it warned that full year revenues would be lower, and losses larger, than previously forecast. U.K.-listed rival IWG PLC issued a similar warning in June. There are signs that WeWork and IWG have overcome the worst — revenues have picked up again since the spring — but both are still losing money. The next weeks are therefore crucial: Even as virus worries re-emerge, they need to boost occupancy so their revenues better cover costs.
Brief: Fears of a new wave of increasingly contagious strains of Covid-19 have knocked investor confidence, with few prepared to make any changes to their portfolio. A poll by interactive investor of 1,617 visitors to its website between 17 and 23 August 2021 found 57% had concerns over the impact further outbreaks of Covid-19 would have on their portfolio. New variants of the virus topped the list of concerns for almost a quarter of the respondents, while almost a third said they were concerned about both new variants and a new wave of the virus. A fifth of those that took part in the poll said they would be increasing their exposure to the stock market, confident that markets will need to get used to Covid-related shocks. However, 65% confirmed they would not be making any changes to their investments.
Brief: As workplaces across the country unveil return-to-office plans, a new survey has found that most employers are shifting away from requiring work to be done in the office full-time. According to an ADP Canada survey conducted by Maru Public Opinion, more than half of Canadian workers will no longer be required to work in the office five days a week. One-third (33 per cent) of employees surveyed say they are expected to return to the office between two and three days a week, while slightly more than one-fifth (21 per cent) say they will have a flexible schedule with no set days in the office. The survey found that 40 per cent of employees will still be expected to come into the workplace five days a week, although Ann Buckingham, executive HR manager at ADP Canada, says this figure largely reflects industries where employees have to be in-person, such as manufacturing.
Brief: Japan’s economic recovery will be delayed more than previously expected as the delta variant pushes up infections to record levels, according to a Bank of Japan board member. “The current spread of infections is more than expected at the time of the July policy meeting,” Toyoaki Nakamura, one of nine members on the board, told reporters in Tokyo. “Downward pressure on the economy is going to continue for the time being.” Prime Minister Yoshihide Suga looks set to expand Japan’s state of emergency to almost 80% of the economy later Wednesday as he tries to contain the latest wave of cases that has put extra strain on the medical system. Nakamura said an expected spending uptick built on pent-up demand had failed to emerge in the summer break as surging infections kept consumers cautious.
Brief: Two months after Goldman Sachs Group Inc. led Wall Street’s return to the office, it’s copying pages from the pandemic playbooks of its more cautious rivals, requiring employees to don masks and prove they’ve been vaccinated against Covid-19 to enter the U.S. workplaces. The more stringent safety measures, announced to staff on Tuesday, signals escalating caution at Goldman, which greeted the return of employees in June with live music and food trucks. Masks will be required starting Wednesday regardless of vaccination status, a company spokeswoman said. People who aren’t fully vaccinated by Sept. 7 will be expected to work from home, she said. Goldman’s decision means all six U.S. banking giants have now instituted some sort of broad mandate that employees get shots or don masks inside buildings -- or in some cases do both.
Brief: Exchange-traded fund investors might be able to take advantage of the rebound in reopening trades. Stocks traded higher Tuesday after the Food and Drug Administration granted Pfizer and BioNTech’s Covid-19 vaccine full approval. Travel, energy and retail stocks were some of the biggest gainers. This means the market is now at an “inflection point,” J.P. Morgan Asset Management’s Bryon Lake told CNBC’s “ETF Edge” on Monday. “We do think that there’s an opportunity for investors to continue to participate in the reopening trade through the end of the year,” the firm’s head of Americas ETF client said. Three key areas are of particular interest to investors as they reposition for the second half of 2021, Lake said: income, short-duration investments and value.
Brief: Earnings at Bank of Nova Scotia and Bank of Montreal got some help from Canada’s economic reopening. The banks reported fiscal third-quarter results on Tuesday that topped analysts’ estimates on gains in domestic personal and business loans as well as continued strength in the Canadian housing market. That helped make up for slower rebounds in the lenders’ U.S. and international businesses. Canada’s vaccination campaign trailed the U.S.’s by a few months, pushing the revival of activities like restaurant dining and nonessential shopping across much of the country into June. The strong domestic results for Bank of Montreal and Scotiabank likely reflect that “initial jolt” of activity from the early phases of the reopening, said Paul Gulberg, an analyst at Bloomberg Intelligence.“Canada looks fairly decent,” he said in an interview. “You have modest growth in loans, and it looks like it’s in both consumer and business lending, not just the mortgage business.”
Brief: Citigroup Inc. is facing a lawsuit for pulling support from a European credit fund as the Covid-19 pandemic roiled the markets, then giving its own traders a potential profit at the fund’s expense. The New York-based bank was sued by Ver Capital Partners in London for forcing the fund to default on a 224 million-euro ($263 million) loan in March 2020 and selling linked assets to its trading desk. This liquidation process created a conflict of interest at the bank, while ignoring the chance of better offers from other possible buyers and leaving the fund further out of pocket, Ver said in a legal filing. Citigroup undervalued the assets it sold to the traders, acting “with the intention of generating a profit for itself” at the expense of “the best price reasonably obtainable,” Ver’s lawyers said in the filing made available last week.
Brief: Hybrid working looks likely to be the working model of the future, with just three-in-10 employees expecting their workforce back onsite full time in two years’ time, a survey by Willis Towers Watson has found.The majority (85%) of businesses have anticipated that most employees who would like to return to the workplace will have done so by the end of 2021, the insurance company found, however working practices are unlikely to return to their pre-pandemic state. Employers have estimated around a quarter (23%) of the workforce will work remotely on a full-time basis in two years' time, while just more than two-in-five (41%) will embrace hybrid working. Lucie McGrath, director of health and benefits GB at Willis Towers Watson, said hybrid working was here to stay, adding: "We've all weathered a huge amount of change over the last two years. Employers should think carefully about how to support their employees' mental health as we adjust to the new working world."
Brief: When clients call Andrew Slimmon for advice on how to position their portfolios given the rapid spread of the delta variant, he tells them in no uncertain terms: Prepare for an economic recovery, and soon. Slimmon, who oversees about $7.5 billion at Morgan Stanley Investment Management, says it’s not unusual to see economic hiccups this time of year. Going forward, “people will turn a little bit more optimistic,” which bodes well for equities that have sold off due to Covid-related worries. Rates could bottom in the coming months and recover in the fourth quarter as well, he added.“The opportunity set is in those stocks that got hit the most, namely the cyclical stocks, the energy stocks, the reopening stocks -- those are the ones that are down the most,” he said in an interview.
Brief: The rally on Wall Street after Pfizer’s Covid vaccine received full approval from the Food and Drug Administration showed “people are desperate to get into stocks,” CNBC’s Jim Cramer said Monday. “You rarely see a market that’s this straightforward, but anything with any cyclicality roared today on the Pfizer story,” the “Mad Money” host said. The S&P 500 advanced 0.8% to close at 4,479.53, while the Dow Jones Industrial Average added 215.63 points, or 0.6%, to finish at 35,335.71. The tech-heavy Nasdaq outperformed, rising 1.5% to close at 14,942.65. “What’s the market telling us here? ... It’s saying that people are desperate to get in, desperate to buy stocks even if they have to pay up. Now there’s a word for these gains, and that word is obvious,” Cramer said.
Brief: Dividends paid to investors are projected to hit $1.39 trillion in 2021, reflecting a recovery that’s stronger than expected, according to a new report from British asset manager Janus Henderson. The 2021 forecast for dividends is just 3% below the pre-pandemic peak, the firm found. Dividend payments in the second quarter jumped 26% from the same period last year to $471.7 billion, just 6.8% below the levels seen in the second quarter of 2019. Janus Henderson projected that dividend payouts will return to pre-pandemic highs within the next 12 months. The research, published Monday, said 84% of companies around the world either increased or maintained their dividends compared to the same quarter in 2020. Much of the growth was attributed to companies restarting frozen payouts and issuing higher special dividends on the back of strong earnings. Underlying dividend growth in the second quarter, stripping out the effects of special dividends and exchange rates, was 11.2%.
Brief: Expectations for a recovery in commodity prices and earnings growth are igniting bullish bets on emerging-market equities after more than a decade of underperformance that left them approaching a 20-year low against developed-nation stocks. Goldman Sachs Group Inc., Bank of America Corp. and Lazard Asset Management expect a boost for developing equities as investors capitalize on cheap valuations once vaccine rollouts pick up, helping the global economy to recover from the pandemic. South Africa, Russia and Brazil are among markets set to benefit, even as China’s regulatory crackdown continues to weigh on Asian equities. In the decade following the global financial crisis, MSCI Inc.’s emerging-market stock index gained just 8%, while the benchmark for developed nations more than doubled. That’s partly due to the slowdown of Chinese economic growth from above 10% in 2010 to around 6% by the end of the decade, resulting in a decline for commodity prices and weak earnings growth.
Brief: Britain's post-lockdown economic rebound slowed sharply in August as companies struggled with unprecedented shortages of staff and materials, though strong inflation pressures cooled a bit, a survey showed on Monday. The IHS Markit/CIPS flash composite PMI dropped for the third month in a row, sinking to 55.3 from 59.2 in July, its lowest since February and a sharper fall than a median forecast of 58.4 in a Reuters poll of economists. The pace of growth was still slightly above the pre-pandemic average but IHS Markit said there were clear signs of the recovery losing momentum after a buoyant second quarter. "Despite COVID-19 containment measures easing to the lowest since the pandemic began, rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages," Chris Williamson, chief business economist at IHS Markit, said.
Brief: Investors in Canada's major banks will be looking for signs of loan growth, impacts of the Delta variant and hints of what the Big Six may do with their cash reserves when they report this week. The banks are widely expected to further unwind the record-breaking amounts of money they set aside last year — at least $16.5 billion across the Big Six — to cover widespread loan defaults that never materialized. Shareholders, however, have already largely factored in the earnings boost from the reserve winddown, as was already seen in U.S. bank earnings last month, said James Shanahan, senior equity research analyst for North American financials at Edward Jones. “In some cases there were earnings beats of 10, 20, 30 per cent, and the stocks were down. So the market clearly isn’t going to reward the Canadian banks if they deliver huge earnings beats and it’s just simply related to reserve releases.”
Brief: Energy-focused hedge fund manager Westbeck Capital Management’s flagship strategy has suffered its first monthly loss in eight months, after surging coronavirus rates in China, Europe and North America dented oil markets – but the fund remains up more than 70 per cent since the start of the year. The Westbeck Energy Opportunity Fund – a long/short directional hedge fund strategy which trades a mix of oil equities, futures and options – fell 5.3 per cent in July. By comparison, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which tracks oil services companies, lost 14.4 per cent in July, while and Brent (total return) gained 2.1 per cent. The USD230 million manager – which is led by co-founders Jean-Louis Le Mee, CIO, and Will Smith, CEO and deputy CIO – has profited from a resolutely bullish stance on oil for much of this year.
Brief: Stocks reversed overnight declines to trade higher Friday, as investors considered the latest batch of earnings and economic data and continued to contemplate the path forward for monetary policy. The S&P 500 rose, though the index was on track to post a weekly decline for the first time in three weeks. Both the Nasdaq and Dow also moved to the upside. Traders this week have watched a number of market concerns unfold, with infections related to the Delta variant continuing to climb and the Federal Reserve suggesting in its latest meeting minutes that officials believed the economy might recover enough by the end of the year to warrant a shift in their massive asset purchase program. New weekly jobless claims fell more than expected to a fresh pandemic-era low, signaling a notable step forward in the labor market's recovery.
Brief: Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Bank of Montreal joined other major financial firms in requiring staff to be fully vaccinated against Covid-19 before returning to the office. All employees of the Toronto-based TD will be asked to register their vaccination status by Sept. 30, according to a memo sent to staff Friday. As of Nov. 1, full vaccination will be required of TD employees working in all company locations globally, a spokesman said. “We believe that the majority of TD colleagues have already been vaccinated. This is great news,” Kenn Lalonde, chief human resources officer, said in the memo. “However, Covid-19 remains with us and the delta variant, which is far more contagious, is spreading in our communities, primarily to those who are unvaccinated.”
Brief: U.K. government borrowing in the first four months of the fiscal year was running at little more than half the level a year earlier as the economy returned to normality after months of restrictions.The budget deficit stood at 78 billion pounds ($106 billion) between April and July, the Office for National Statistics said Friday. That compares with 139.7 billion pounds in the same period of 2020, when the economy was under siege from the coronavirus pandemic. July alone saw the deficit narrow to just 10.4 billion pounds as self-employed workers made payments ahead of a tax deadline. The shortfall was smaller than economists forecast. Tax revenue surged by almost 16% from a year earlier, and spending fell 3.5%.
Brief: On Thursday morning, we noted that challenges were emerging for the health of the economic expansion, mostly due to the still-raging COVID-19 pandemic. Those signs continued into the end of this week. After highlighting that at least two Wall Street firms had either cut or cautioned on their economic growth forecasts, the team at Goldman Sachs followed this week with a reduction in its third quarter gross domestic product (GDP) outlook. Goldman's economics team led by Jan Hatzius said in a note to clients third quarter growth should come in at an annualized rate of 5.5%, well below the 9% the firm was previously forecasting. The team at Oxford Economics also published its latest weekly recovery tracker, which showed a decline for the week ending Aug. 6. Nearly all of the index's components cooling off.
Brief: Research from Barclays Smart Investor revealed that 63% of investors believe that pandemic-hit industries such as hospitality and travel will bounce back, even though two thirds named new coronavirus variants as their biggest concern for financial markets. The survey of 2,000 UK investors also revealed that 59% of respondents are worried about rising inflation, while half the respondents said they are concerned about a market bubble bursting by the end of the year. A tech bubble is of a particular concern, with 42% of respondents naming this as a worry. Despite these fears, however, 59% of investors revealed they are feeling optimistic about financial markets for the rest of the year, while 60% are confident the successful vaccine rollout will help markets.
Brief: The “fluidity” of virtual conferencing has proved a “silver lining” during the pandemic, optimising allocator time during the investor due diligence process, according to new research by alternatives-focused software-as-a-service and data management company Vidrio Financial. In a new market commentary, Mazen Jabban, founder and CEO of Vidrio Financial, examined the sweeping changes and far-reaching impact of virtual manager meetings on hedge fund manager-investor relationships over the course of the Covid-19 pandemic. New Vidrio Financial research shows 100 per cent of those surveyed expect a transition to a hybrid mix of virtual and in-person meetings – the so-called “new normal” – when it comes to the due diligence and asset allocation process, with one manager not expecting return to in-person due diligence meetings until 2022.
Brief: According to IBM, 23 per cent of all cyber-attacks are directed at financial institutions, while the total cost of a single data breach is the second largest among all industries, costing financial organisations USD5.72 million on average. Another study indicated that 53 per cent of data breaches are financially motivated, so the industry is constantly on the cybercrime radar. In other sectors, malicious users get a foothold through social engineering, credential stuffing, and application vulnerabilities. However, the Finance sector is different as these users primarily compromise internal corporate networks. The pandemic has accelerated the digital shift, with enterprises focusing on securing cloud environments.
Brief: Stocks dropped, while Treasuries and the dollar rose as concern about the withdrawal of Federal Reserve stimulus mixed with growing angst around the coronavirus and global supply chains. The S&P 500 was down for a third day, and a gauge of equity volatility headed for its biggest weekly increase since January. Commodities sold off, with iron ore plunging and oil on track for its longest losing streak since the early days of the pandemic. The rout in Chinese companies listed in the U.S. deepened after the industry was hit with a fresh round of proposed regulations, with Alibaba Group Holding Ltd. and Baidu Inc. tumbling. Investors are bracing for the withdrawal of unprecedented liquidity as the developed world looks to mass vaccinations to keep the recovery on track. swings.
Brief: As Goldman Sachs Group Inc.’s top brass sounded the alarm of a return to pre-pandemic office life, one group of workers was reassured they’d get to keep some of their treasured flexibility. The Wall Street firm’s coders can continue to work from home two days a week, according to people briefed on the firm’s plans. They’re not alone. Across financial services, the software engineers who have been at the heart of talent wars are winning more freedom than the bankers they work with. Wells Fargo & Co. told employees last month that work from home will be capped at two days a week for many roles, but said it would make an exception for most of its technology team. Citigroup Inc. chalks up some of its recent wins around tech recruiting to the firm’s greater flexibility around remote work. Other lenders, including Barclays Plc, have also made clear that some roles would get more flexibility and the bank would leave the details of its hybrid approaches to the managers. The British bank is giving up its second office in London’s Canary Wharf financial district.
Brief: The pandemic remains a part of the economic story. In June 2020, Federal Reserve Chair Jay Powell said at a press conference, "The extent of the downturn and the pace of recovery remain extraordinarily uncertain and will depend in large part on our success in containing the virus. We all want to get back to normal, but a full recovery is unlikely to occur until people are confident that it is safe to reengage in a broad range of activities."In the year-plus that has followed, the economy has enjoyed a very strong recovery. But the current spread of the Delta variant throughout the U.S. now has economist cautioning that the pandemic is again throttling the speed at which the economy is bouncing back.
Brief: ONR, a leader in transforming the customer experience (CX) for Fortune 500 companies today has shared new data highlighting how consumers, and thus businesses have pivoted successfully acting on key learnings measured during the pandemic that will impact commercial relationships in a post-COVID-19 world. Looking forward, loyalty has taken on a major significance, with customers clearly seeking trusted brands that make them feel like "they are taken care of, and a part of the family." For companies, greater emphasis on more bespoke customer facing solutions will allow brands to acquire deeper understanding and the quicker ability to address new needs in the customer's experience and customer journeys.Coming out of the extended lockdowns caused by COVID-19 and now the Delta Variant, brands in all business segments have seen continued heightened consumer uncertainty, and sustained awareness and attention on health and wellness in not only the products purchased, but also the service experience for retailing and purchase.
Brief: CNBC’s Jim Cramer said Tuesday that investors need to be on their toes as Wall Street trudges through a period of frequently re-evaluating the Covid recovery. Reaction to Home Depot’s earnings report before the market open Tuesday demonstrates the need to be nimble, the “Mad Money” host said. “Don’t get too complacent in your negativity.” Shares of the home improvement retailer closed down more than 4% even after the company beat analyst expectations on revenue and earnings. However, same-store sales slightly missed forecasts, and the company also said it recorded fewer customer visits to stores during the second quarter. “In the end, Home Depot will be fine. ... The real issue is that the consumers sure picked an awful time to go back to travel and recreation,” Cramer said.
Brief: Stocks posted their biggest decline in a month amid concern that the global economic recovery will lose momentum with further shutdowns to contain a coronavirus resurgence. Traders watched closely Federal Reserve Chair Jerome Powell’s remarks during a town hall with educators and students, where he noted the central bank’s “powerful tools” have limitations. Powell also said that COVID-19 will likely stay “for a while,” and we’re not going back to a pre-pandemic economy. Policy makers will gather next week for the Jackson Hole symposium, the Fed’s most-prominent annual conference. “We’re essentially in a bit of a holding period ahead of Jackson Hole,” wrote Craig Erlam, senior market analyst at Oanda Europe. “While there is a fair amount of data releases this week, some of which may carry a little more weight than others, it’s all about the Fed in these markets at the minute, and that’s unlikely to change unless the delta situation gets dramatically worse.”
Brief: During the heightened volatility sparked by the outbreak of the Covid-19 pandemic, investors found liquidity, price discovery, usage, and transaction costs to be pressure points across sectors in the bond markets – including high yield, investment-grade corporate, emerging markets, and, for a short time, U.S. Treasuries. With stress permeating global markets and investment decision-making processes, institutional investors sought relief through the use of fixed income ETFs. According to a global survey of 766 institutional investors, 54%1 increased their use of fixed income ETFs to source, price, and transact in bond markets during heightened pandemic-related volatility. Based on what they experienced and learned during the pandemic an additional 34% say they are likely to increase their use of fixed income ETFs in the future.
Brief: Less than half of fund managers expect the European economy to improve over the next 12 months, down sharply from 80% in the previous month, as concerns about the spread of coronavirus dampen optimism, the latest Bank of America (BofA) European fund manager survey shows. The 17 August survey of 232 participants representing $702bn AUM showed 44% of participants expect the EU macro cycle to improve further, the least optimistic outlook for the bloc's prospects since June 2020 and marking a substantial decline from the March 2021 peak of 94%. BofA attributed the decline to coronavirus-related concerns, with 19% of investors citing the Delta variant as the biggest tail risk facing markets, up from 9% in May, closely behind inflation concerns (20%) and worries about a taper tantrum (22%).
Brief: No skills? No degree? You're hired. The hiring logjam showed some signs of easing in July. But companies in the trenches trying to match labor demand and supply still see a market that continues to be imbalanced — and tilted heavily towards those looking for work. "No matter what source you use right now, fundamentally there [are] 40% more jobs open today than there [were] before the pandemic began," ZipRecruiter CEO Ian Siegel told Yahoo Finance Live on Monday. "And that was already a white hot job market." As of the end of June, a record 10.1 million jobs were available in the U.S. But as ZipRecruiter (ZIP) said in its second quarter letter to shareholders, the labor market today is one of "disequilibrium."
Brief: Stocks dropped from a record as traders assessed the latest round of economic data amid growing concern that more shutdowns will be necessary to contain a fast-spreading pandemic. Most major groups in the S&P 500 fell, with consumer-discretionary, industrial and commodity shares leading losses. The dollar climbed. Home Depot Inc. sank after the retailer posted weaker-than-expected results in the second quarter. Chinese stocks listed in the U.S. faced another wave of selling as authorities in Beijing ramped up their crackdown on some of the nation’s largest companies. Alibaba Group Holding Ltd., Baidu Inc. and JD.com Inc. slumped at least 2.5 per cent. U.S. homebuilder sentiment sank to a 13-month low in August amid high costs as well as continuing supply shortages.
Brief: U.K. wage growth hit a record as companies posted more than 1 million new job vacancies for the first time in an unprecedented scramble for staff following the loosening of lockdown rules. Average earnings in the three months through June surged a record 8.8% from a year earlier, the Office for National Statistics said Tuesday. While the figure partly reflects distortions created by the pandemic, underlying wage pressures are also gathering pace. The pickup underscores the scale of the recovery from the deepest economic slump in 300 years. Although the Bank of England expects strains in the labor market to prove temporary, policy makers warned this month that meeting the 2% inflation target will require a modest withdrawal of monetary stimulus.
Brief: Leases have historically been slow to evolve. Traditional fixed rent leases are inherently predictable and inflexible, with a focus on security of occupation for tenants and income for landlords. This comes as no surprise given that, after staffing costs, the largest overhead for most businesses is real estate. However, in recent years there have been nudges towards greater flexibility and innovation, and the Covid-19 pandemic has thrown the suitability of traditional leases into question. The uncertainty created by the pandemic means there is considerable appeal for many in finding more flexible workspace solutions, provided through shorter term rolling contracts with smaller initial investments. This allows tenants the opportunity to move, expand and contract according to business needs while maintaining a degree of control over costs.
Brief: Here’s a market milestone to encapsulate how stunning the recovery rally has been: The S&P 500 just doubled its level from its pandemic closing low. The broad equity benchmark has rallied 100% on a closing basis from its Covid trough of 2,237.40 on March 23, 2020. It took the market 354 trading days to get there, marking the fastest bull market doubling off a bottom since World War II, according to a CNBC analysis of data from S&P Dow Jones Indices. The S&P 500 closed at a record 4,479.71 Monday, up 0.3% on the day and 100.2% higher than its low Covid close.During the financial crisis, the S&P 500 hit its bottom at 676.53 on March 9, 2009, and the benchmark did not double that number on a closing basis until April 27, 2011. On average, it takes bull markets more than 1,000 trading days to reach that milestone, the analysis showed.
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