2024-10-15 15:56

LONDON, Oct 15 (Reuters) - Argentina's bid to reverse a London court ruling which left it facing a 1.56-billion-euro ($1.7 billion) bill over GDP-linked securities has been refused by the United Kingdom's Supreme Court, the court said on Monday. Four hedge funds, holding around 48% of the securities issued between 2005 and 2010, sued Argentina in 2019 and London's High Court ruled in their favour last year – leaving Argentina on the hook for 1.33 billion euros plus interest. Argentina was given permission to try and overturn the huge bill, but the Court of Appeal rejected the republic's case in June. Its application for permission to appeal that decision was refused by the Supreme Court on Oct. 8, a court spokesperson said, and first reported by Bloomberg. The refusal marks the end of any route of appeal and is a blow for Argentina, which is struggling with triple-digit inflation, a deep recession and poverty rates over 50%. Sign up here. https://www.reuters.com/business/finance/argentina-cannot-appeal-17-bln-securities-bill-uk-court-rules-2024-10-15/

2024-10-15 15:17

Investment banking fees jump 20% Provisions for credit losses rise Asset, wealth unit oversees record $3.1 trillion Oct 15 (Reuters) - Goldman Sachs' (GS.N) , opens new tab profit beat estimates in the third quarter, fueled by a rebound in bond sales, stock offerings and mergers that sent its shares up more than 3% on Tuesday. The Wall Street giant's gains echoed those at rival JPMorgan Chase (JPM.N) , opens new tab and Citigroup(C.N) , opens new tab, which also cashed in on debt and equity offerings as clients' economic confidence improved. "We see significant pent-up demand from our clients," CEO David Solomon told analysts on a conference call. The bank's deal backlog rose in the third quarter, driven by its advisory business, "and we expect our leading investment banking franchise to benefit from the continued resurgence in activity." Robust U.S. jobs and wage growth have underscored the resilience of the economy, while an interest-rate cut by the Federal Reserve has encouraged companies to pursue transactions. Investment banking fees jumped 20% to $1.87 billion. Leveraged finance, which refers to loans made to risky ventures like funding buyouts, and investment-grade activity drove a jump in debt underwriting. Equity underwriting also fetched higher revenue, thanks to a slew of secondary share sales. Goldman achieved "a powerful revenue beat across all segments, showcasing the rebound in capital markets is underway, and we believe has durability," said Stephen Biggar, banking analyst at Argus Research. The bank also scored a key victory in the quarter, advising Cheez-It maker Kellanova (K.N) , opens new tab on its nearly $36 billion acquisition by family-owned candy giant Mars, the biggest deal in the U.S. so far this year. "We are seeing increased client demand for committed acquisition financing, which we expect to continue on the back of increasing M&A activity," Goldman's Chief Financial Officer Denis Coleman said on a conference call with analysts. While private equity players were getting more active, they were still lagging expectations, Solomon said. Goldman also benefited from easier comparisons with the year earlier, when it took sizeable writedowns on the consumer business and real estate investments. "Goldman Sachs certainly advanced with a big jump in earnings per share," said Octavio Marenzi, CEO of management consultancy Opimas. It "had a good quarter, but it could have been a brilliant one." Revenue from fixed income, currency and commodities trading fell 12%, while equities trading jumped 18%. PROVISIONS WEIGH Despite the stronger results, the bank booked $397 million in provisions for credit losses, compared with $7 million a year ago. It set more money aside to cover potential losses in its credit card portfolio. Goldman continues to take writedowns on its ill-fated consumer business two years after stepping back from it. The bank has since shifted its focus back on traditional mainstays of investment banking and trading. In exiting a credit card venture with automaker General Motors (GM.N) , opens new tab, which signed a deal with Barclays (BARC.L) , opens new tab, Goldman took a one-time hit of $415 million that included a writedown related to the transfer of the business to Barclays. Its card partnership with Apple (AAPL.O) , opens new tab is also facing an uncertain future, with JPMorgan in talks to replace Goldman as the tech behemoth's credit-card partner. Executives declined to comment on the status of the card partnership. Total profit jumped 45% to $2.99 billion, or $8.40 per share, for the three months ended Sept. 30, higher than expectations of $6.89, according to the estimates compiled by LSEG. Asset and wealth management - the unit that caters to institutions and high net-worth individuals - fetched 16% higher revenue than a year ago. The bank supervised a record $3.1 trillion of assets in the third quarter. Its headcount was 46,400, compared with 44,300 as of June end and 45,900 a year earlier. Sign up here. https://www.reuters.com/business/finance/goldman-sachs-profit-jumps-45-investment-banking-strength-2024-10-15/

2024-10-15 15:04

NY Fed finds higher expected longer-run inflation expectations NY Fed: Americans projected higher levels of credit delinquency NY Fed: Expected home price, rent cost increases ebbed in September NEW YORK, Oct 15 (Reuters) - Americans said they expected higher inflation over the longer run last month, as their expectations of credit turbulence rose to the highest level since April 2020, the Federal Reserve Bank of New York said in a report on Tuesday. While inflation a year from now is seen holding steady at 3%, three years from now it is seen at 2.7% from August’s 2.5% estimate, and at 2.9% in five years, from 2.8% in the August survey, the bank said in its latest Survey of Consumer Expectations. Meanwhile, while perceptions and expectations for credit access improved, the report found that expected credit delinquency rates continued to rise and hit the highest level in over four years. The report noted the average expected probability of missing a debt payment over the next three months rose for a fourth straight month to 14.2%, from August’s 13.6%, suggesting some Americans are facing increased issues with managing their borrowing. While that perceived probability was highest among households with incomes below $50,000, the largest increase was among respondents with household income above $100,000. Those respondents saw the greatest chance of falling into delinquency in 10 years. The New York Fed data comes as central bankers are debating how aggressively they’ll need to press forward with rate cuts after kicking off the process with a half percentage point easing last month. Fed officials tied that initial move to easing inflation pressures as well as what appeared to be rising risks to the job market. They penciled in an additional 50 basis points’ worth of cuts into year end amid expectations of further declines in inflation. The monetary policy outlook has however been tested by September job market data that proved far more robust than most had projected, which in turn called into question both the size of future cuts and their pace. On Monday, Fed Governor Christopher Waller said recent data does not show an economy that’s slowing down all that much, adding, “while we do not want to overreact to this data or look through it, I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting.” Inflation expectations data is closely watched by Fed officials because they believe the price pressure outlook exerts a strong gravitational pull on current inflation readings. Last Thursday, New York Fed President John Williams expressed his confidence in the outlook by saying “one positive piece of data that reinforces my confidence that inflation is on course to reach our 2% goal is that inflation expectations remain well anchored across all forecast horizons.” The New York Fed report found a small decrease in expected future house price gains, while expectations of future food price increases rose in September, while expectations for rent, gas and medical care ebbed. The bank also reported that expectations of year-ahead income and spending declined slightly, while some aspects of job market expectations around finding new work improved. Sign up here. https://www.reuters.com/markets/us/us-consumers-see-higher-long-run-inflation-rising-delinquency-risk-2024-10-15/

2024-10-15 12:25

NEW YORK, Oct 15 (Reuters) - Two former top executives at Linde Plc (LIN.DE) , opens new tab will join activist investor Paul Hilal in his bid to shake up management and the board at rival industrial gas company Air Products and Chemicals (APD.N) , opens new tab, people familiar with the matter told Reuters. Dennis Reilley and Eduardo Menezes are teaming up with Hilal's investment firm Mantle Ridge LP which has built a stake of more than $1 billion in Air Products, said the people who are prohibited from discussing the firm's strategy publicly. Reilley is a former chief executive and chairman at Praxair, an industrial gases company that is now part of Linde, and served on the boards at DuPont de Nemours (DD.N) , opens new tab, CSX (CSX.O) , opens new tab, Dow Chemical, HJ Heinz and Entergy (ETR.N) , opens new tab. Menezes is a former executive vice president for Europe, Middle East and Africa at Linde and also previously worked at Praxair in senior roles. In his last position at Linde he was responsible for operations in more than 40 countries which had sales of more than $8 billion. Hilal is also working with other former Praxair and Linde executives to push for changes at Air Products, the sources said. These include succession planning for octogenarian chief executive Seifi Ghasemi, restructuring the board, improving capital allocation and overhauling the company's strategy, people familiar with Hilal's strategy said. Air Products was not immediately available for comment. Hilal helped install Ghasemi as CEO in 2014 when he first researched Air Products as a partner at Pershing Square Capital Management. But a decade on Ghasemi at age 80 ranks among the oldest CEOs at S&P 500 companies and has indicated he would like to stay on. His contract is renewed yearly for the next four years. Hilal is eyeing Reilley to become Air Products' executive chairman while Menezes might become chief executive officer, the sources said. Since leaving Pershing Square to launch Mantle Ridge, Hilal has invested in less than a handful of companies, including CSX, Aramark (ARMK.N) , opens new tab and Dollar Tree (DLTR.O) , opens new tab, and replaced the chief executive officer at all of them. Hilal has previously recruited executives from rival companies to join him in his campaigns. Hedge fund D.E. Shaw is also pushing for changes at Air Products and said last week the company needs to articulate a clear succession plan, refresh its board and limit capital expenditures. Sign up here. https://www.reuters.com/markets/commodities/former-linde-executives-team-up-with-mantle-ridge-push-changes-air-products-2024-10-15/

2024-10-15 12:23

PARIS, Oct 15 (Reuters) - Europe must cancel its plan to ban new fossil fuel-emitting cars from 2035 to reduce reliance on China's battery supply chain and play to its technological strengths, BMW's (BMWG.DE) , opens new tab chief executive said on Tuesday. Oliver Zipse, who has long pushed for regulators to permit various technologies - including alternative fuels like e-fuels or biofuels and hydrogen fuel cell cars - said the mood in Europe was "trending towards one of pessimism" and the region needed a new regulatory framework to remain competitive. "A correction of the 100% BEV target for 2035 as part of a comprehensive CO2-reduction package would also afford European OEMs less reliance on China for batteries," Zipse said at the Paris Motor Show, adding: "To maintain the successful course, a strictly technology-agnostic path within the policy framework is essential." In March 2023, EU countries approved a landmark law that would require all new cars to have zero CO2 emissions from 2035, effectively banning diesel and petrol vehicles, and 55% lower CO2 emissions from 2030, compared to 2021 levels. Carmakers including BMW, VW and Renault, as well as the Italian government, have called for the CO2 targets to be loosened or delayed, fearing the impact of heavy fines because of lower-than-expected EV sales. Still, Zipse's home country of Germany has rejected an early review of the targets, given the need for clarity for industry and the urgency of tackling climate change. Also in Paris, the head of France's auto association PFA stopped short of calling for the 2035 ban to be abolished, but said it was necessary to quickly "come back around the table" to discuss the review of the targets, currently scheduled for 2026. Sign up here. https://www.reuters.com/business/autos-transportation/bmw-ceo-says-europe-must-cancel-ban-petrol-engines-reduce-reliance-china-2024-10-15/

2024-10-15 12:21

Oct 15 (Reuters) - UBS Global Research on Tuesday raised its year-end target for the benchmark S&P 500 (.SPX) , opens new tab index to 5,850 points from an earlier projection of 5,600, boosted by corporate profit growth, supportive macro-economic backdrop and interest rate cuts. The index, which has gained 22.85% so far in 2024, jumped to a record closing high of 5,859.85 points a day earlier. "Rate cuts should lower interest expense and default risk, adding to both EPS (earnings-per-share) and valuations," analysts led by Jonathan Golub said. "Financial conditions point to less stress/more liquidity, a positive for valuations," they added. UBS also raised its 2025 year-end target for the S&P 500 to 6,400 from 6,000 earlier. Strength in technology stocks could help the index further, it said. The U.S. central bank in September kicked off an anticipated series of interest rate cuts with a larger-than-usual half-percentage-point reduction that Federal Reserve Chair Jerome Powell said was meant to show commitment to sustaining a low unemployment rate as inflation had eased. UBS expects the Fed to cut rates by 250 basis points through 2026 and said a sharp decline in interest rates could likely lift profit margins by 20 basis points. Sign up here. https://www.reuters.com/markets/us/ubs-lifts-year-end-target-sp-500-5850-points-2024-10-15/