The probability of a U.S. recession in the next two years has increased to 40% from last month's median of 35%, according to Reuters' latest poll of more than 100 economists taken Dec 6 to Dec. 13. In addition, economists in the Reuters poll expect the Federal Reserve to raise interest rates on Dec. 19 and expect only two rate hikes in 2019, similar to the consensus in Bloomberg's survey of economists taken Dec. 7 to Dec. 11.
In regulatory news, the Federal Housing Finance Agency is seeking public comment on a proposed a rule that would establish standards and criteria to validate and approve third-party credit score models used by government-sponsored enterprises Fannie Mae and Freddie Mac.
Goldman Sachs Group Inc., Citigroup Inc. and JPMorgan Chase & Co. are among global banks that invested in AccessFintech, an Israel-based risk management startup, Reuters reports.
Amid a rapidly weakening leveraged loan market, Bank of America Corp. and three other global banks sought to have greater flexibility when they agreed to finance the $4.4bn takeover of U.K.-based travel technology company Travelport Worldwide Ltd by private equity firms Siris Capital Group LLC and Evergreen Coast Capital Corp. The terms gave the banks the ability to increase interest rates on the yet-to-be-issued Travelport debt and tighten covenants if needed.
Bank of New York Mellon Corp. is not proceeding with its initial plan to move to a new London headquarters in the early 2020s, sources told the Financial Times. The U.S. investment bank will instead extend its lease on its current base in 160 Victoria Street, which expires in 2023.
Morgan Stanley will close its equities and currency sales and tradings desks in Moscow, and move some jobs to to London, sources told Bloomberg News. The investment bank's Russian operations will continue to focus on corporate finance, capital markets and mergers and acquisitions.
On the M&A front, Salisbury, Md.-based Delmar Bancorp and Fredericksburg, Va.-based Virginia Partners Bank agreed to a merger of equals. The deal, valued at about $55.1 million, would see Virginia Partners become a separate wholly owned subsidiary of Delmar through an exchange of shares in an all-stock transaction.
Wilmington, Del.-based WSFS Financial Corp. and Philadelphia-based Beneficial Bancorp Inc. plan to consolidate 25% of their combined retail banking locations and sell five additional locations in connection with their merger.
In Canada, CI Financial Corp. has agreed to buy a majority stake in digital advice platform WealthBar.
In other parts of the world
Asia Pacific: India mulls injecting more capital to public banks; Philippines holds rates
Europe: Basel targets banks inflating leverage ratios; Sabadell selling Solvia to Intrum
Middle East & Africa: Saudi Arabia said to be secretly buying stocks; Mozambique cuts rate
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Midwestern banks keep the app upgrades coming: When it comes to digital enhancements, some banks in the U.S. Midwest have not been idle, having rolled out mobile app upgrades such as video deposit capture, self-service card controls and biometric login options.
Reduction in operating level could equate to more rebates for credit unions: The board of the National Credit Union Administration lowered the normal operating level of the share insurance fund from 1.39% to 1.38%.
The day ahead
Early morning futures indicators pointed to a lower opening for the U.S. market.
In Asia, the Hang Seng decreased 1.62% to 26,094.79, while the Nikkei 225 was down 2.02% to 21,374.83.
In Europe as of midday, the FTSE 100 fell 0.80% to 6,822.14, and the Euronext 100 was down 0.97% to 941.36.
On the macro front
The U.S. Retail Sales report, the Industrial Production report, the PMI Composite FLASH, the Business Inventories report and the Baker-Hughes Rig Count report are due out today.
Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.
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