What Bank Earnings Reveal About the Health of the Economy

Can banks bounce back?

US banks JPMorgan Chase and Wells Fargo reported. solid earnings and returns It rose on Friday, pushing the stock higher in pre-market trading. His PNC Bank, a smaller lender, also saw a significant increase in profits.

It’s too early to say the worst of the banking crisis is over, despite the brighter results than analysts expected.

Bank financial results are being watched closely for what they say about the health of the wider economy. With the US potentially on the brink of a recession, inflation overheating and investors wanting to know more about the damage done to the sector by the Silicon Valley Bank collapse, the next upside for bank earnings waves have become particularly important.

Harvard University economist and former Treasury official Karen Dynan told The Times: Bank earnings could be the final piece of the puzzle to clarify where the economy is headed.

A big focus is on deposits. federal data show Customers withdrew more than $600 billion from their accounts in the first quarter of this year. Most of that deposit came in the days following his SVB collapse last month.most of it Inflows to money market fundsThis is a move that will bring solid returns on personal deposits, but could discourage lending and investment in the broader economy.

Small and medium-sized lenders aren’t the only ones in the spotlight. Wall Street analysts say the big three — JP Morgan, Bank of America and Wells Fargo $61 billion decrease First Quarter Deposits. Big bank chiefs expect scrutiny on deposit flows and the impact of the decline of midsize lenders on their businesses.

The pressure to strengthen the balance sheet could bring chills to lending. The recession, coupled with rising interest rates, Economists are concerned.

“Bank lending is arguably the most important component of a strong economy. Insights are very important right now,” said David Trainer. The CEO of investment research firm New Constructs said in a note this week:

At 7am ET, JPMorgan Chase shares were up nearly 6% in pre-market trading. After the failure of Silicon Valley Bank, its stock slipped into the red along with much of the sector.

this is what is happening

A National Guard officer has been arrested in connection with the leak of Ukrainian war documents. Jack Teixeira, a 21-year-old Air Force soldier, has been detained after federal officials said he shared classified information to an online gaming chat group. The leak contains a series of national security secrets, including US surveillance related to the war in Ukraine. He is scheduled to appear in federal court on Friday.

DOJ plans to ask the Supreme Court to stay a ruling on abortion drugs. The decision follows last week’s ruling by a Texas judge that mifepristone should be withdrawn from the market more than 20 years after it was approved by the FDA.

Boeing shares plunge on 737 MAX warning. airplane manufacturer warned thursday Problems with that production affect the delivery of the narrowbody jet. The problem was that one of his suppliers to Boeing, Spirit He Aerosystems, used “non-standard” fittings in the fuselage assembly. The company said it wasn’t necessarily a safety issue, but could pose a compliance issue.

Infectious disease experts are preparing for the next Covid-like pandemic. Superspreader viruses like Covid-19 are emerging more rapidly in an era of global travel and climate change. Airfinity, a predictive disease specialist, odds More than a quarter of such pandemics will occur in the next decade.

Blockbuster deal rocks NFL

Another record is about to be set in the world of professional sports. Dan Snyder has reached a deal to sell NFL’s Washington his Commanders to billionaire investor Josh Harris for his $6 billion.

NFL Franchise Ratings SoarLast year, Rob Walton and members of the Walton and Penner families bought the Denver Broncos for $4.65 billion. Over the past decade, NFL franchise prices have risen more than four times his.

Here’s how Commander’s deals stack up:

• Commander Washington (2023?): $6 billion

• Denver Broncos (2022): $4.65 billion

• Carolina Panthers (2018): $2.22 billion

• Buffalo Bills (2014): $1.4 billion

Money is pouring into the league. The NFL has signed a landmark broadcast deal worth over $100 billion in 2021. It is the most profitable in professional sports in the United States. Games are also very popular. Broadcasts consistently rank among many of the most-watched live TV shows, and advertisers are enthusiastic about the action. Advertisement prices skyrocketed at this year’s Super Bowl, with a 30-second slot costing him over $7 million.

The NFL club is the “Rolls-Royce of American sports leagues.”

Commander trades still require league approval. Snyder and Harris will have to get the consent of 24 of the 32 team owners. That might not be too difficult, as Mr. Snyder was wildly unpopular with the Commanders fanbase and the team was investigated by the league for possible financial improprieties and accusations that he enabled a culture of sexual harassment by team executives. It has been.

If the sale is approved, Harris, 58, co-founder of private equity giant Apollo Global, would gain ownership of a third professional sports team. He is also the co-owner of the NBA’s Philadelphia 76ers and his NHL’s New Jersey Devils.

Price records may not last long. The bid for English Premier League football club Manchester United is set to enter the third round. The club’s owners, the Glaser family, are reportedly seeking a price in the $7 billion range.

52 percent

— Percentage of Germans opposed to ending the use of nuclear power, according to a poll by Germany’s largest daily newspaper Bild.Europe’s largest economy is slated Closing the final three factories this weekendbut Russia’s efforts to move away from its dependence on oil have raised questions for many consumers.

Quiet Billionaire Bernard Arnault

Business leaders who typically top the list of global wealth are known as master disruptors who have helped create entirely new sectors. Think Amazon’s Jeff Bezos or Elon Musk, who co-founded PayPal before trying to mainstream electric cars with Tesla. Bernard ArnaultCEO of French luxury goods group LVMH.

Arnault turned LVMH into Europe’s most valuable listed company. The group’s market capitalization, with brands like Louis Vuitton and Tiffany & Co., has more than doubled over the past four years, despite severe headwinds, and is closing in on the $500 billion club. We were able to overtake Mobil and banking giant JPMorgan Chase.

LVMH’s rebound since the pandemic has been spectacular. Sales plummeted when Chinese consumers, the world’s largest luxury consumers, were unable to travel abroad to stock up on handbags and jewelry. And the country’s lockdown has hit spending.

It all started with Christian Dior. In 1984, Mr. Arnault acquired a holding group containing renowned brands. In a short period of time, he sold most of the underperforming labels and turned the ailing Dior into a powerhouse: he helped found his LVMH three years later, and soon became the group’s major shareholder, Established position as CEO and Chairman.his business mantra As summarized in an interview with The Wall Street Journal:

Mr. Arnault takes a more low-key approach than his wealthier peers. The 74-year-old regularly appears alongside some of the world’s biggest celebrities at his brand’s fashion shows, but has tried to keep a low profile. he is shy very privatebut he has a ruthless reputation for making deals that earned him the nickname “Wolf of Cashmere”.

But there are clouds on the horizon. Demand in the US is slowing. With Arnaud’s five children occupying senior positions in the group, questions about succession are growing. And in his native France, his wealth hasn’t completely diminished. Demonstrators against pension reform storm headquarters On Thursday, we chanted, “There’s money in a billionaire’s pocket!”

speed lead

bargain

policy

• China said it would work with other agencies and governments to help resolve the issue. sovereign debt crisis It affects many developing countries. (FT)

• of DOJ urges SEC to proceed cautiously In renovating the way the stock market operates. (Bloomberg)

• Republican presidential candidates, including former President Donald Trump, Florida Gov. Ron DeSantis and former U.N. Ambassador Nikki Haley, are scheduled to address the National Rifle Association’s annual convention on Friday. (NYT)

• Germany Reportedly Pushing Intel spend more With a $19 billion chip factory if US companies want to secure more government subsidies. (FT)

best of the rest

• “Billionaire Harlan Crowe bought property from Clarence Thomas. Justice did not disclose the transaction” (ProPublica)

• A VHS tape of “Rocky” sold for $27,500, another sign that the nostalgic business is booming. (NYT)

• “We have to slow down the race God-like AI”(FT)

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