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Fed extends Volcker provision compliance; Morgan Stanley faces probe over alleged loan sales contests

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Insight Weekly: Global stock performance; hydrogen pilot projects; Powell's Fed future unsure

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How Financial Institutions are Managing Exposure to U.S. Municipals

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Top 100 Banks: Capital Ratios Show Resilience to the Pandemic

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Banking Essentials Newsletter: October Edition


Fed extends Volcker provision compliance; Morgan Stanley faces probe over alleged loan sales contests

On the regulatoryfront, banks finally received confirmation that they had more time todivest themselves of pre-2014 investments in hedge funds. The Federal ReserveBoard officially extended the deadline to July 21, 2017.

U.S. homeowners have apparently benefitedfrom the Brexit vote, according to TheWall Street Journal's Heard on the Street. Following Britain's vote toleave the EU, mortgage rates have fallen sharply, driving refinancing activityeven higher.

Data from Thomson Reuters' Lipper service showed thatinvestors withdrew $1.3billion from financial and banking sector funds during the seven-day period through July 6.

Twenty of the world's big banks have lost about halfa trillion dollars in value since the beginning of the year. That would beequal to about $465 billion, the Journal reports,citing data from FactSet. And this isnot just because of Brexit. The Chinese economy, the path of U.S. interestrates and oil prices have been weighing on the markets since the start of theyear. The banks named are JPMorganChase & Co., WellsFargo & Co., Bankof America Corp., CitigroupInc., Goldman SachsGroup Inc., MorganStanley, Royal Bankof Scotland Group Plc, HSBCHoldings Plc, BarclaysPlc, StandardChartered Plc, UBS AG,Credit Suisse Group AG,BNP Paribas SA,Crédit Agricole SA,Société Générale SA,UniCredit SpA,Deutsche Bank AG,Banco Santander SA,Industrial & Commercial Bankof China Ltd. and MitsubishiUFJ Financial Group Inc.

Following discussions with several M&Aadvisers, analysts and investors, Bloomberg News is out with a listof potential major deals, which it says "could make sense — if theywere allowed to happen." The news agency says bank mergers (such asJPMorgan acquiring Standard Chartered or Wells Fargo acquiring Credit Suisse) "couldhelp fix the industry."

Massachusetts Secretary of the Commonwealth WilliamGalvin is investigatingMorgan Stanley over its alleged loan sales contests, the New York Post has learned.

On ratings,Raymond James analysts downgradedBofA and Wells Fargo to "market perform" from "outperform,"and Umpqua Holdings Corp.to "outperform" from "strong buy," ahead of thesecond-quarter earnings season. In addition, a Goldman Sachs analyst downgradedNorthern Trust Corp. to"neutral" from "buy," while received an upgrade, to "overweight"from "neutral," from Piper Jaffray.

S&P Global Ratings revised its outlook on to from stable.

In peoplenews, activist investor Joseph Stilwell called on the management of Lacey,Wash.-based Anchor Bancorpto find a "suitable mergerpartner."

David Farnsworth will begin serving as of Ontario,Calif.-based CVB Financial Corp.on July 18.

In the specialtylender scene, Freddie Maccompleted jointsystem-to-system testing with Common Securitization Solutions as preparationfor using their Common Securitization Platform.

CommunityChoice Financial Inc's indirect units signed an omnibus asset andequity swap agreementwith QC Holdings Inc.and QC Financial Services Inc.

Inother parts of the world

Asia-Pacific: BOC applies for Chilean branch license; Citi to merge EMEA, Asiaconsumer banking ops

Middle East & Africa:

Europe: 5US banks pledge support for London; curtain falls on AXA in Serbia

The day ahead

Early morning futures indicators pointed to a higher openingfor the U.S. market.

In Asia, the Hang Seng was down 0.69% to 20,564.17, and theNikkei 225 fell 1.11% to 15,106.98.

In Europe as of midday, the FTSE 100 had fallen 0.06% to6,529.69, and the Euronext 100 was up 0.42% to 829.07.

On the macro front

The employment situation report, the consumer credit reportand the Treasury STRIPS report are due out today.

S&PGlobal Ratings and S&P Global Market Intelligence are owned by S&PGlobal Inc.

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