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UniCredit considers cutting around 10,000 jobs under new plan-sources

Italy's biggest bank by assets UniCredit is considering cutting around 10,000 jobs, or 10 percent of its global workforce, as part of a new business plan to be unveiled in December, two sources close to the matter said on Monday. One of the sources said the bank would announce at least 9,000 redundancies and the job cuts would occur almost entirely in Italy. Negotiations with unions, which are set to begin after the 2020-2023 business plan is announced on Dec. 3, could lead to a smaller number of redundancies. UniCredit declined to comment. News of the planned job cuts was first reported by Bloomberg.

Iran's ability to influence oil market is limited

The rise in new suppliers of oil and gas has reduced the ability of Iran to influence global oil markets, U.S. Energy Secretary Rick Perry said on Monday. The price of crude jumped on Monday following Iran's seizure on Friday of a British-flagged oil tanker in the Strait of Hormuz, but had pared initial, steep gains by 1427 GMT. "I am concerned about it," Perry told a news conference in Jerusalem, referring to the price rise that followed the ship's capture. "But we find ourselves in a completely different situation than we were a decade ago." "New suppliers should help keep a steady supply of fuel - whether it's crude, natural gas or other secondary products. I think you will see less displacement of the market when there is an event like we see happening," he said. "The Iranians will have a more difficult time in influencing the market than they would have 10 years ago."

Morgan Stanley profit beats on wealth management gains, lower expenses

Morgan Stanley reported a drop in quarterly profit but beat analysts' expectations on gains in its wealth-management business and lower expenses. The results capped earnings for big U.S. banks and underscored weakness in Wall Street-focused businesses in a quarter marked by lower market activity due to trade tensions and rising bets of a cut in interest rate. Morgan Stanley is distinct from its competitors in that it gets half of its revenue from wealth management, which acts as a ballast during market fluctuations. Revenue from the wealth management business rose 1.9% to $4.40 billion from a year earlier, and accounted for 43% of total revenue. The business beat its pre-tax margin target at 28.2%. Chief Executive Officer James Gorman has been focusing on the unit to help the bank tide over swings in market-related businesses. Morgan Stanley shares were 1.4% lower in pre-market trading Thursday. Overall, Morgan Stanley's sales and trading revenue fell 12%, with both bond and equity trading seeing a dip. By comparison, main rival Goldman Sachs Group Inc (N:GS) on Tuesday reported a drop in revenue from bond trading but higher equities trading. Morgan Stanley Chief Financial Officer Jonathan Pruzan described the quarter as strong overall, and said that the 14% decrease year over year in equity sales and trading net revenues was due to last year's exceedingly good first six months. "We are No. 1 in the world in (equities sales and trading) business," Pruzan said. "The first half of last year was quite strong - tax cuts, global synchronized growth, all that good stuff." Revenue from investment banking, which includes advising on deals and helping corporations raise money, fell 13%, helping push the bank's total revenue down to $10.2 billion. The bank said earnings attributable to Morgan Stanley fell to $2.20 billion, or $1.23 per share, in the second quarter ended June 30, from $2.44 billion, or $1.30 per share, a year ago. Non-interest expenses fell 2% to $7.34 billion, helped by lower compensation costs. Analysts were looking for a profit of $1.14 per share, according to IBES data from Refinitiv, with revenue of $9.99 billion.

Crude Prices Rise as Iran Says It Seized Foreign Oil Tanker

Oil prices extended gains on Thursday after Iran said it had seized a foreign tanker in the Persian Gulf, pushing geopolitical premiums higher after a brief lull. New York-traded West Texas Intermediate crude futures rose 30 cents, or 0.5%, to $57.08 a barrel by 8:13 AM ET (12:13 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., gained 48 cents, or 0.8%, to $64.14. Several media reports cited Iranian state TV as saying that Revolutionary Guards forces seized a foreign tanker with 12 crew members accused of smuggling oil. The tanker was reportedly seized in the strait of Hormuz, a key shipping route for oil. Oil prices had been under pressure earlier this week in part from reports that the U.S. and Iran might begin talks soon, ratcheting down the recent tension in the Middle East. Ellen Wald, president of Transversal Consulting and Investing.com contributor, pointed to the fact that the “mere possibility” of negotiations between Washington and Iran had driven U.S. crude down more than 3%. “Overall, this shows that without the Iran tensions, oil prices would be lower, and absent the start of a war, the prices are not likely to increase much based on the Iran situation,” she said. Thursday’s gains in oil were the first after three consecutive sessions of losses due to several bearish factors beyond the Middle East. Contributing to this week’s selloff was the fact that Hurricane Barry passed without causing as much damage as feared, and oil rigs began preparations to restart production. That means they'll be able to contribute again relatively soon to a U.S. market that is already amply supplied: data from the Energy Information Administration showed that, despite a slightly larger-than-expected draw in U.S. crude inventories last week, gasoline and distillate stockpiles surged. In other energy trading, gasoline futures advanced 0.5% to $1.8881 a gallon by 8:15 AM ET (12:15 GMT), while heating oil gained 0.8% to $1.9075 a gallon. Lastly, natural gas futures traded up 0.9% to $2.325 per million British thermal unit.

IMF says regulators must address possible risks from Facebook's Libra

Facebook Inc's planned cryptocurrency, Libra, could help boost financial inclusion, but also raises concerns about consumer protection, data privacy, and potential "backdoor dollarization," the IMF's chief economist said on Wednesday. Gita Gopinath told reporters the International Monetary Fund was flagging risks and concerns about Facebook's plans, and said it was important for regulators to pay close attention to such developments. "It is very important for regulatory agencies in the world to pay close attention to these developments and to make sure that they are not too late in undertaking the right steps," Gopinath said. On Wednesday, members of the U.S. House Financial Services Committee are questioning David Marcus, the Facebook executive overseeing the Libra project. Marcus was grilled on Tuesday by the U.S. Senate Banking Committee over the possible risks posed by Libra to data privacy, consumer protections and money laundering controls. The social media company is seeking to win over Washington after it shocked regulators and lawmakers with its June 18 announcement that it hopes to launch a new digital coin called Libra in 2020. Policymakers and financial watchdogs in the United States and elsewhere fear widespread adoption of the digital currency by Facebook's 2.38 billion users could upend the financial system. Gopinath said the Fund favored expanded financial inclusion, and digital currencies could play a role in that process. But she said there were also important questions about consumer protection, data privacy, the impact on monetary policy and other issues. "If you look particularly at countries that are not reserve currency countries, would this lead to backdoor dollarization?" she said. "All of these questions (and) whether there will be enough checks and balances in place to prevent money laundering ... are very important." Facebook is one of 28 founding members of the Libra Association which will be headquartered in Geneva and which is in talks with Swiss regulatory authorities about a framework.

Amazon’s Prime Day Surpassas Black Friday, Cyber Monday

Prime Day is the new Black Friday if you look at the results for Amazon. The e-commerce giant reported that this year’s two-day shopping extravaganza was bigger than last year’s Black Friday and Cyber Monday combined, with 175 million items sold. The July 15-16 sale was also the biggest event for Amazon devices like Echo Dot, Fire TV Stick and Alexa Voice Remote, the company said. “Members purchased millions of Alexa-enabled devices, received tens of millions of dollars in savings by shopping from Whole Foods Market and bought more than $2 billion of products from independent small and medium-sized businesses,” CEO and Founder Jeff Bezos said in a press release. Amazon shares were offset by news that the European Union has opened an antitrust investigation into its use of merchants’ data. Amazon fell 0.5% in midday trade.

Tech executives head to Capitol Hill for antitrust hearing

Executives from tech giants Apple Inc, Amazon.com Inc, Facebook Inc and Alphabet's Google go before the House Judiciary Committee's antitrust panel Tuesday to discuss competition in online markets. The committee is likely to discuss antitrust probes of the four companies under way at the Justice Department and Federal Trade Commission, as well as allegations that the companies seek to thwart nascent competitors. Democrats, in particular, are expected to press Facebook about a proposed $5 billion settlement between the company and the FTC to resolve allegations that the company violated a 2011 consent agreement by inappropriately sharing information on 87 million users with the now-defunct British political consulting firm Cambridge Analytica. Facebook is likely to note it has increased spending on security and moderating content to keep hate speech and disturbing videos off of the site. Other congressional panels Tuesday will focus on Facebook's plans to bring out a cryptocurrency, the Libra, and allegations that Google is biased against conservatives in search results. The companies are expected to argue that they face plenty of competition and that consumers have alternate choices for search, social media, online purchasing and wireless devices. Witnesses include Google's Adam Cohen, director of economic policy; Nate Sutton, an associate general counsel at Amazon; Matt Perault, head of global policy development at Facebook and Apple's Kyle Andeer, a vice president and chief compliance officer. While the tech companies appear to have few friends on Capitol Hill, there has been some pushback from Republicans against a proposal by Senator Elizabeth Warren, who is running for president, that Amazon, Facebook and Google be forced to divest companies that they purchased previously. "I don't think the goal of antitrust law is to break up a big company just because they're big," said Representative Kelly Armstrong, a Republican from North Dakota, on Fox Television. "I don't ever want to penalize any company for success."

JPMorgan profit beats estimates on strength in consumer banking

JPMorgan Chase & Co reported a better-than-expected quarterly profit on Tuesday as higher interest income and buoyant consumer lending offset lower activity at its trading desks. Even as the world's biggest bank recorded record earnings, there were warning signs that the playing field is beginning to tilt against the financial industry. JPMorgan's net interest margin declined to 2.49% from 2.57% a year ago as deposit rates rose and the rate the bank paid on other borrowings rose. Citigroup similarly reported a decline in net interest margin on Monday, which sent bank stocks lower. Trading volumes have been lower at large U.S. banks as a tit-for-tat tariff war between Beijing and Washington has kept investors on edge. A flattening of the yield curve and rising bets of an interest rate cut have also challenged banks' ability to boost revenues. Average loans at the largest U.S. bank, however, increased 2% on the back of an 8% rise in credit-card loans. The earnings beat was driven by JPMorgan's consumer bank, Chase, which reported credit card loans were up 2%, credit costs were flat and overall income was up 22%. Chief Executive Officer Jamie Dimon remained bullish about the U.S. economy. "We continue to see positive momentum with the U.S. consumer – healthy confidence levels, solid job creation and rising wages – which are reflected in our Consumer & Community Banking results," he said in a statement. Income from consumer and community banking, JPMorgan's largest business, rose 22% to $4.17 billion, offsetting declines across its other main businesses. Total net interest income, the difference between what banks pay on deposits and earn on loans, rose 7% to $14.40 billion. Investors, however, worry that if the U.S. Federal Reserve cuts interest rates in July, it could pressure margins at banks, which have benefited recently from higher rates. Net income climbed 16% to $9.65 billion. Excluding the tax gain, it earned $2.59 per share. Net revenue rose 4% to $29.57 billion. Analysts were expecting earnings of $2.50 per share and revenue of $28.90 billion, according to IBES estimate from Refinitiv. The bank’s return on tangible common equity, a key profit measure for how well it uses shareholder money, rose to 20%, up from 19% in the first quarter and higher than the bank’s 17% target. JPMorgan's results are closely watched by investors looking to gauge the health of the U.S. economy. Among other banks reporting results on Tuesday are Goldman Sachs Group Inc and Wells Fargo & Co.

Gold Prices Edges Higher Despite Boost in Risk Appetite

Gold prices headed higher on Monday as a boost in risk appetite from generally positive economic data was insufficient to derail demand in an environment marked by decreasing yields. Gold futures for August delivery on the Comex division of the New York Mercantile Exchange, gained $1.35, or 0.1%, to $1,413.55 a troy ounce by 9:06 AM ET (13:06 GMT). Even though China registered its worst growth in 27 years during the second quarter, upbeat readings on the country’s industrial production, retail sales and capital spending in June were enough to offer hopes that the world’s second largest economy was stabilizing. The NY Empire State manufacturing index also showed a much-stronger-than-expected bounce in July, although it recovered only half of the ground it lost in June. "The manufacturing sector remains vulnerable, especially if trade talks hit a brick wall," ING chief international economist James Knightley said via Twitter. Despite the positive reaction to the data in global equities on Monday - U.S. futures pointed to new record highs at the open - gold managed to hold its own, continuing to benefit from expectations that interest rates will fall. The Federal Reserve is widely expected to cut interest rates at the end of the month for the first time in a decade, lowering the opportunity cost of holding non-yielding bullion. As expectations for further policy easing across the globe increase, yields have been dropping on most fixed-income products bonds, even those traditionally seen as high-risk in economic downturns. Mohamed El-Erian, chief economist at Allianz, tweeted that “even some high yield (‘junk’) bonds now trade at negative yields -- ie, creditors PAY for the privilege of financing companies with notable default risk." More than $13 trillion of bonds worldwide currently carry negative yields, that is, they yield less than gold in absolute terms. John Reade, chief market strategist at the World Gold Council, suggested that, while gold has essentially been range-bound for the last three weeks, some of its technical factors are improving. Reade said that “the extreme overbought condition saw in June has moderated a lot”, while the “50-day moving average is climbing, making gold look less extended." In other metals trading, silver futures rose 0.4% to $15.293 a troy ounce by 9:07 AM ET (13:07 GMT). Palladium futures advanced 1.5% to $1,565.75 an ounce, while sister metal platinum gained 1.5% to $846.90. In base metals, copper traded up 0.8% to $2.715 a pound.

Citigroup profit beats estimates on gains in consumer lending

Citigroup Inc beat analysts' estimates for quarterly profit on Monday, as a tight lid on costs and strength in consumer lending helped the third-largest U.S. bank counter weakness in its trading business. New York-based Citi is the first major bank to report second-quarter earnings. Wall Street titans JPMorgan Chase & Co, Bank of America Corp and Goldman Sachs Group Inc are scheduled to report later in the week. Citi shares were up 0.8 percent in premarket trading. Bank stocks have been falling in recent weeks amid concerns that their net interest margins, or the difference between what they pay on deposits and earn on loans, have been squeezed by falling interest rates. Citi's interest margin declined slightly to 2.67% from 2.70% a year earlier and 2.72% in the first quarter of 2019. Citi continued to add loans and deposits in the most recent quarter, allaying concerns that a weaker economic outlook was hurting consumers' ability to borrow. Total loans at the third-largest U.S. bank by assets rose 3% to $689 billion, while deposits increased 5% to $1.05 trillion, excluding foreign exchange fluctuations. Trading revenue remained challenged. Fixed-income trading fell 4%, excluding a gain from Citi's investment in Tradeweb, while it declined 9% at its equities business. Executives at leading U.S. banks had warned that trading revenue would be hit by a slump in client activity due to burgeoning trade tensions and uncertainties around Britain's planned exit from the European Union. "We navigated an uncertain environment successfully by executing our strategy, and by showing disciplined expense, credit and risk management," Chief Executive Officer Michael Corbat said in a statement. A key was that the bank was able to make more money from its lending activities during the quarter. Net interest income rose 2%. Net income rose to $4.80 billion, or $1.95 per share, in the second quarter, from $4.50 billion, or $1.63 per share, a year earlier. The quarter included a one-time gain of 12 cents per share related to the investment in electronic trading company TradeWeb (O:TW). Revenue rose 2% to $18.76 billion, while expenses fell 2%. Analysts had expected a profit of $1.80 per share and revenue of $18.50 billion, according to IBES data from Refinitiv. One of the broadest measures of performance improved dramatically as Citi posted a return on tangible common equity of 11.9%. up more than a percentage point from a year earlier.