Archives of “citigroup” tag

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Strong close for US stocks

  
Analysis, US Market
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Major indices close at session highs

Today saw the stock market rotate into the Dow and broader S&P indices. The tech heavy NASDAQ was the laggard. However a late day surge “raised all boats”. The Dow had its best day since June 29. The dow rose for the 3rd day in a row.

The final numbers are showing:
  • S&P index rose 42.39 points or 1.34% to 3197.61
  • NASDAQ index rose 97.73 points or 0.94% to 10488.53
  • Dow industrial average rose 557.72 points or 2.14% at 26643.53
Leading the Dow 30 were:
  • Caterpillar, +4.96%
  • Travelers, +3.8%
  • Chevron, +3.49%
  • Exxon Mobil, +3.31%
  • Home Depot, +3.25%
  • McDonald’s, +3.19%
  • UnitedHealth, +2.96%
  • Goldman Sachs, +2.58%
  • Boeing, +2.48%
Other big gainers today included:
  • First Solar, +9.96%
  • Alcoa, +9.47%
  • Rite Aid, +7.57%
  • Schlumberger, +5.81%
  • Ford Motor, +5.12%
  • NVIDIA, +3.31%
Laggards included:
  • Wells Fargo, -4.55%
  • Intuit, -4.13%
  • Citigroup, -3.93%
  • Slack, -3.14%
  • LYFT, -3.02%
  • Delta Air Lines, -2.61%
  • Uber, -2.51%

Month-end rebalancing points to strong USD-selling – Citi

  
  Analysis
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It’s almost June

It's almost June
Citi’s month-end rebalancing model flags a strong USD sell signal against EUR and GBP at this month-end
“Our Asset Rebalancing Model notes a rotation from equities into bonds at May month end. The signal is moderately strong coming in at -1.4/+1.3 historical standard deviations (hist. std. dev.) for equities and bonds respectively.
The FX impact notes selling of USD against EUR and GBP at month end,” Citi notes.
Typically, month-end FX re-balancing flows is felt most going into the 4pm London fix on the last trading day of the month.

Base-case still for Fed to stay on hold in December and through 2020 – Citi

  
  Analysis
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Citi on the Fed outlook

Citi discusses the Fed policy trajectory in light of yesterday’s FOMC minutes from the October meeting.

“Minutes from the October 30th FOMC released overnight are broadly consistent with Citi analysts expectations for disagreement regarding the need to cut, but agreement that on leaving policy rates on-hold. On USD supply to year end (the more interesting part of the Minutes), Fed officials continue to look for ways to make sure funding pressures in the overnight lending market don’t cause a problem again with a “standing repo” seen as the preferred option that would likely provide substantial assurance of control over the federal funds rate (and USD supply). However, Citi analysts do not expect a final decision until H1 2020. ,” Citi notes.

“The Citi analyst view remains for the Fed to stay on hold in December and through 2020 though muted inflation makes hikes in the next year very unlikely. Cuts are possible should domestic activity data indicate a slowdown,” Citi adds.

Week ahead: US earnings, South Africa rates, EC president vote

  
  Analysis
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No summer hours here. Investors are bracing for a busy week as earnings season gets under way in America, in Europe parliament votes for a new president for the European Commission and on both sides of the Atlantic, investors face a deluge of economic data. Here’s what to watch in the coming days. US earnings Banks unofficially kick off second-quarter earnings season on Monday and investors will be tuning in to see whether corporate America is headed for its first earnings recession since 2016. Citigroup starts the earnings party on Monday and JPMorgan Chase, Goldman Sachs and Wells Fargo follow suit on Tuesday. Prospects of rate cuts by the Federal Reserve are unnerving investors that are watching to see if this could squeeze banks’ profit margins. My colleague Rob Armstrong has more in his excellent bank earnings curtain raiser. I

in all, nearly 60 companies in the S&P 500 are expected to report results including the big banks, Netflix, Microsoft, Schlumberger and Johnson & Johnson. US data Markets have largely pencilled in a cut by the Fed at its monetary policy meeting this month, though investors continue to debate how many cuts the central bank may push through this year and how deep the cuts will be. To get a better picture of the US economy and clues to Fed policymakers’ thinking, investors will closely parse a string of economic data for updates on consumer and industrial health. Americans are expected to have tightened their purse strings a little last month with headline retail sales expected to rise 0.2 per cent month-on-month, following a stronger 0.5 per cent increase in May. Control sales, which strip out volatile items like food, energy and building materials, are expected to rise 0.3 per cent. Investors will also tune into consumer sentiment data later in the week. Updates on the industrial sector come via regional manufacturing surveys as well as industrial production data, which is expected to show factory output cooled. The economic calendar also includes updates on the housing market. UK data

The economic calendar across the pond also promises to be busy with jobs data, inflation and retail sales on the docket. As markets consider the possibility of a rate cut by the Bank of England, “next week’s raft of UK data are likely to give ammunition to both sides of the argument,” noted economists at ING. While wages are expected to tick back up, they said “the high street isn’t feeling the benefit of this modest improvement in real wage growth”. However, they added: “With Brexit noise only likely to increase over the coming months, and a risk that trade tensions could worsen, we think the Bank of England will keep rates on hold for the rest of the year.”

EU Commission president On Tuesday the European Parliament votes on the next EU Commission president. Ursula von der Leyen has promised parliament a bigger say in Brussels’ decision-making as she seeks MEPs for the top post in Brussels for the next five years. “A successful vote will be largely ignored by markets, but a failure to garner enough support (which is still a possibility) could blow up the entire deal that the Council reached earlier this month, though we do think that Ms [Christine] Lagarde’s ECB nomination will be safe either way,” said strategists at TD Securities. South Africa rates On Thursday attention shifts to South Africa, where the reserve bank is widely expected to announce a 25 basis point cut to the repo rate, putting it at 6.5 per cent. Since the last SARB meeting in May, the monetary policy committee has undergone a massive transition. Strategists at TD Securities “think the message will be moderately dovish, suggesting potentially more easing,” and expect “slightly positive” reaction in the rand as they argue markets have “priced for more easing than we expect”.

Ireland Rescue Imminent As Bund Spreads Pass 720bps

  
  Education
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At last check Irish-Bund spreads were north of 725 bps, meaning Ireland is now effectively insolvent, and joins Greece in the group of bankrupt European countries. If this blow out is not stopped immediately, the contagion will again spread to the periphery first and then to the core shortly thereafter. The only question is when, just like in the case of oh so coy Greece, will Lenihan admit defeat and ask the IMF and the ECB for help (oh, and do it so during a Citigroup-mediated conference call). However, as Market News reports, citing Handesblatt, the Irish rescue may be imminent, and may come as soon as today.

From Market News:

 
 

Eurozone governments are preparing for a possible Greece-style rescue for Ireland although the country has not yet asked for financial assistance, German daily Handelsblatt reported Thursday, citing German government sources.
 (more…)

The Woman Who Made It on Wall Street

  
Education, US Market
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Sallie

Women are the foot soldiers of the business world, but they are rarely the generals. So it’s worth asking why no female has been as successful in scaling Wall Street as Sallie Krawcheck, Bank of America’s (BAC) wealth management chief. While other women struggle to avoid the “glass cliff,” she barely walks into a bank before she is groomed as a future CEO.

Krawcheck is best known for the kind of media adoration you can’t buy—for instance, that famous cover story from Fortune magazine, “In Search of the Last Honest Analyst.” But her rise began well before—and was speedy. In six years Krawcheck went from junior banker at Donaldson Lufkin & Jenrette to chief executive of research firm Alliance Bernstein. She clocked just two years at Citigroup (C) before becoming CFO in 2004. Nine months after a falling-out with Citigroup CEO Vikram Pandit in 2008, she was back in the game with a better deal: Bank of America wooed Krawcheck, just 45, to run its mammoth brokerage. And within six weeks on the job, she was named as a possible successor for its departing CEO. But as successful as she has been in winning over the media, interviews with former colleagues show Krawcheck has been just as effective in winning over her peers, too. Her rise has not been flawless and is still not assured after her troubled turn as Citi CFO. But it is very real.

Read More …Click here

Citi forecasts Greek devastation, unstoppable debt spirals in Italy and Portugal

  
Analysis, Education
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If Citigroup is right, the slight rebound in Europe over the summer will not be enough to stop Club Med going from bad to worse, with a string of soft defaults/restructurings.

I pass their latest forecasts on to readers. I do not endorse them.

Italy will bounce along in near-permanent recession with growth of 0.1pc in 2014, zero in 2015, and 0.2pc in 2016. The debt will punch above 140pc of GDP, beyond the point of no return for a country with no economic growth or sovereign currency.

“We do not expect the public debt ratio will enter a downtrend in coming years, and we suspect that some form of debt restructuring (maturity lengthening and/or coupon reductions) may be likely eventually,” said the bank.

Portugal is in an even worse state, with growth of: 0.6pc, 0.0pc, 1.0pc, over the next three years, with debt hitting 149pc of GDP by 2015, and unemployment rising again to 18.3pc:

Given the fiscal tightening still to come, ongoing private deleveraging and ensuing poor nominal GDP growth prospects, doubts still exist about the sustainability of the Portuguese public debt in our view.”
A second full bail-out programme remains a clear risk in the event of market sentiment deteriorating. In any case, we think a Greek-style public debt restructuring unlikely in the near future, but a restructuring of some government contingent liabilities is still possible. (more…)

Govt. Opening New Front in the "War on Wall Street," WSJ Reports

  
Analysis, Economy, Education
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Federal prosecutors are conducting a preliminary criminal probe into whether several Wall Street banks misled investors about their roles in mortgage-backed deals, The WSJ reports.

The banks in the early stages of scrutiny are: JPMorgan, Citigroup, Deutsche Bank and UBS. Under similar preliminary criminal scrutiny are Goldman and Morgan Stanley, as The WSJ reported yesterday. 

As our guest Todd Harrison, CEO of Minyanville.com, explains, these probe leaks are part of a larger, growing attack against Wall Street. (See: The War on Capitalism)

The focus of the inquiry are mortgage-backed collateralized debt obligations or CDOs and whether banks misled investors about these bets.

So why the focus on these specific derivatives?

“Presumably what’s closest to home, no pun intended, for a lot of people is their mortgages and foreclosures that we’re seeing,” Todd tells Aaron in the accompanying segment. “So those are the instruments that kicked Main Street in the groin pretty much. That’s where the line was drawn for a lot of the populace anger to really start to percolate.”

Harrison, who warns against the unintended consequences of Wall Street reform in an earlier segement, says policymakers risk going down a “slippery slope” by attacking financial instruments they don’t understand in an effort to score political points.  

Citigroup ceo wants to thank you for the $45 billion bailout

  
Analysis, Economy, Education
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March 4 (Bloomberg) — Citigroup Inc. Chief Executive Officer Vikram Pandit plans to tell U.S. taxpayers he’s grateful for the $45 billion bailout that helped stave off a deposit run at the bank in 2008, a person close to the company said.

Pandit, scheduled to appear in Washington today before a panel overseeing the bank-bailout program, will acknowledge that the infusion stabilized Citigroup, said the person, who requested anonymity because the planned testimony isn’t public. Pandit will thank the government for providing the money, the person said

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