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Tag: Banks

  • We’re trimming a bank stock on tear since earnings, booking nearly a 100% profit

    We’re trimming a bank stock on tear since earnings, booking nearly a 100% profit

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  • There is enough competition for banks in Switzerland, says country’s finance minister

    There is enough competition for banks in Switzerland, says country’s finance minister

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    Squawk Box Europe

    Karin Keller-Sutter, Switzerland’s finance minister, discusses geopolitical fragmentation and banking consolidation in the country.

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  • Barclays profit jumps 23% in third quarter, beating expectations

    Barclays profit jumps 23% in third quarter, beating expectations

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    LONDON — British bank Barclays on Thursday reported £1.6 billion ($2 billion) net profit attributable to shareholders for the third quarter, beating expectations.

    The result compared with the £1.17 billion net profit forecast in an LSEG poll of analysts and was 23% higher than the same period in 2023.

    Revenue for the period came in at £6.5 billion, slightly ahead of a forecast of £6.39 billion.

    Barclays shares opened 2% higher in London.

    The lender’s return on tangible equity rose to 12.3% from 9.9% in the second quarter, as its CET1 ratio — a measure of solvency — rose to 13.8% from 13.6%.

    Earlier this year, Barclays announced a strategic overhaul in an effort to cut costs, boost shareholder returns and stabilize its long-term financial performance, placing more focus on domestic lending while reducing costs at its more volatile investment banking unit. That strategy has included the acquisition of U.K. retail banking business Tesco Bank.

    In the second quarter, Barclays net profit fell slightly year-on-year amid lower income at its U.K. consumer bank and corporate bank, as net profit jumped 10% at its investment bank.

    Those gaps closed in the third quarter, with domestic bank income up 4%, with the lender raising its annual forecast for U.K. retail net interest income to £6.5 billion from £6.3 billion. Corporate bank income was 1% higher due to a rise in average deposit balances, while investment banking income gained 6%.

    Amid declines, income at Barclays’ private U.S. consumer bank dipped 2% year-on-year as its wealth management unit fell 3%.

    Barclays CEO C. S. Venkatakrishnan told CNBC on Thursday the results showed the bank was on track to meet the targets it had set out in February.

    “We are guiding upwards in our net interest income, and we’ve had two continuous quarters of NII expansion in our business in the U.K. So we’re guiding up, both for the U.K. business and for the bank as a whole, and then we see costs very much under control.”

    The bank now sees group NII of above £11 billion for full-year 2024, from a previous outlook of £11 billion.

    Barclays shares have soared 55% in the year to date after dipping in 2023.

    Several banks have announced plans to restructure, streamline operations and cut costs as they face a potential weakening of net interest margins as interest rates fall. HSBC earlier this week said it would consolidate its operations into four business units.

    “What I would say on interest rates is, Barclays has had a very disciplined approach to interest rate management, and so we’ve got this thing called the structural hedge, which is a way of smoothing out the effects of interest rates on our income, and that’s part of what is causing our NII expansion over the last couple of quarters. So we are pretty well protected against changes in interest rates in the near term,” Venkatakrishnan said.

    Deutsche Bank kicked off the third-quarter reporting season on Wednesday, posting higher-than-expected net profit as revenue at both its investment bank and asset management divisions jumped 11% year-on-year.

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  • Watch Ripple CEO Brad Garlinghouse speak live on legal battle with SEC and upcoming election

    Watch Ripple CEO Brad Garlinghouse speak live on legal battle with SEC and upcoming election

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    Ripple Labs CEO Brad Garlinghouse will speak at DC Fintech Week in Washington, D.C., on Wednesday afternoon.

    Ripple, the largest holder of XRP coins, scored a partial victory last summer after a three-year legal battle with the U.S. Securities and Exchange Commission. This was hailed as a landmark win for the crypto industry as it established a precedent that could help determine when other cryptocurrencies might be deemed securities. The SEC appealed that decision earlier this month.

    Garlinghouse will discuss that lawsuit, along with Ripple’s role in informing U.S. crypto regulation more broadly. He will also speak about the upcoming presidential election and his donations to the Fairshake pro-crypto political action committee.

    The CEO will also talk about why his company is entering the burgeoning stablecoin space this year with the launch of Ripple USD (RLUSD).

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  • Apple and Goldman Sachs ordered to pay more than $89 million for Apple Card failures

    Apple and Goldman Sachs ordered to pay more than $89 million for Apple Card failures

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    Apple CEO Tim Cook introduces the Apple Card during a launch event at the Apple headquarters in Cupertino, California, on March 25, 2019.

    Noah Berger | AFP | Getty Images

    The Consumer Financial Protection Bureau ordered Apple and Goldman Sachs on Wednesday to pay more than $89 million for mishandling consumer disputes related to Apple Card transactions.

    The bureau said Apple failed to send tens of thousands of consumer disputes to Goldman Sachs. Even when Goldman Sachs did receive disputes, the CFPB said the bank did not follow federal requirements when investigating the cases.

    Goldman Sachs was ordered to pay a $45 million civil penalty and $19.8 million in redress, while Apple was fined $25 million. The bureau also banned Goldman Sachs from launching new credit cards unless it can provide an adequate plan to comply with the law.

    “Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers. Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law,” said CFPB Director Rohit Chopra.

    Apple Card was first launched in 2019 as a credit card alternative, hinged on Apple Pay, the company’s mobile payment and digital wallet service. The company partnered with Goldman Sachs as its issuing bank, and advertised the card as more simple and transparent than other credit cards.

    That December, the companies launched a new feature that allowed users to finance certain Apple devices with the card through interest-free monthly installments.

    But the CFPB found that Apple and Goldman Sachs misled consumers about the interest-free payment plans for Apple devices. While many customers thought they would get automatic interest-free monthly payments when they bought Apple devices with an Apple Card, they were still charged interest. Goldman Sachs did not adequately communicate to consumers about how the refunds would work, which meant some people ended up paying additional interest charges, according to the CFPB.

    It also meant some consumers had incorrect credit reports, the agency said.

    “Apple Card is one of the most consumer-friendly credit cards that has ever been offered. We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers,” Nick Carcaterra, vice president of Goldman Sachs corporate communications, told CNBC. “We are pleased to have reached a resolution with the CFPB and are proud to have developed such an innovative and award-winning product alongside Apple.”

    Representatives from Apple did not immediately respond to CNBC’s request for comment.

    — CNBC’s Hugh Son contributed to this report.

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  • Watch live as CFTC Chairman Rostin Behnam speaks at DC Fintech Week

    Watch live as CFTC Chairman Rostin Behnam speaks at DC Fintech Week

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    Rostin Behnam, chairman of the Commodity Futures Trading Commission, is speaking at DC Fintech Week in Washington, D.C. on Wednesday morning.

    The agency is in a critical period: The CFTC sought to block financial exchange Kalshi from offering contracts that allow people to bet on the outcomes of U.S. elections. The agency lost that suit in September, and an appeals court lifted a temporary injunction that barred Kalshi from offering contracts bidding on elections.

    The CFTC is appealing the ruling.

    “The position of the commission has actually been pretty consistent for the better part of a decade, that we don’t believe listing event contracts on political elections is legal,” Behnam said in a Bloomberg Television interview Tuesday. “But while we have this ongoing legal challenge, we’ll allow them and we’re going to do what we can to protect the integrity of the markets.”

    The CFTC has also been grappling with the rapid evolution of digital assets and the need for Congress to take the first steps toward establishing a regulatory framework to ensure consumer protections.

    “What has concerned me most throughout the expansion of this digital asset class is that while everyday Americans fall victim to one digital asset scam after another, there remains no completed legislative response,” he said July in testimony before the U.S. Senate Committee on Agriculture, Nutrition and Forestry.

    “Federal legislation is urgently needed to create a pathway for a regulatory framework that will protect American investors and possibly the financial system from future risk,” he added.

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  • AI on the trading floor: Morgan Stanley expands OpenAI-powered chatbot tools to Wall Street division

    AI on the trading floor: Morgan Stanley expands OpenAI-powered chatbot tools to Wall Street division

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    Morgan Stanley is expanding the use of OpenAI-powered, generative artificial intelligence tools to its vaunted investment banking and trading division, CNBC has learned.

    The firm, which launched an AI assistant based on OpenAI’s ChatGPT technology to its wealth management advisors in early 2023, began rolling out another version called AskResearchGPT this summer in its institutional securities group, said Katy Huberty, Morgan Stanley’s global director of research.

    The tool lets users extract answers from across the universe of Morgan Stanley’s research — including on stocks, commodities, industry trends and regions — collapsing what could otherwise be the cumbersome task of gleaning insights from the more than 70,000 reports produced annually by the bank.

    “We see it as a game changer from a productivity standpoint, both for our research analysts and our colleagues across institutional securities,” Huberty said in an interview. The tool helps staff “access the highest quality, most insightful information as efficiently as possible.”

    Since its arrival as a viral consumer app in late 2022, OpenAI’s generative AI technology has been swiftly adopted by Wall Street’s largest players.

    Morgan Stanley says that close to half of its 80,000 employees are using generative AI tools created with OpenAI, while at rival JPMorgan Chase, about 60% of the firm’s 316,043 employees have access to a platform using OpenAI’s models, said a person with knowledge of the matter who wasn’t authorized to disclose the figure publicly. The San Francisco-based startup recently raised money at a $157 billion valuation.

    OpenAI already has network advantages in financial services because of its ample funding and early focus on use cases for banks, said Pierre Buhler, a banking consultant with SSA & Co.

    “They are ahead of everyone else in terms of market penetration,” Buhler said.”But it is an emerging market, and we are still at the very beginning.” It’s likely that competitors to OpenAI such as Anthropic will gain use over time, he added.

    Viral hit

    At Morgan Stanley, a leader in global investment banking and trading along with JPMorgan and Goldman Sachs, employees have gravitated toward AskResearchGPT, using it instead of getting on the phone or lobbing an email to the research department, Huberty said.

    Employees are asking the tool three times the number of questions as compared with a previous tool based on traditional AI that’s been in use since 2017, according to the bank.

    It’s most in-demand among salespeople and other client-facing staff who often field questions from hedge funds or other institutional investors, said Huberty.

    “We found that it takes a salesperson one-tenth of the time to respond to the average client inquiry” using AskResearchGPT, she said.

    Productivity boost

    In a recent demonstration, the GPT-4 based chatbot was able to summarize Morgan Stanley’s position on matters from copper to Nvidia to the finer points of standing up a data center, understanding industry-specific jargon and providing charts and links to source material.

    The bank wants to push adoption further in light of the productivity gains it’s seeing, Huberty said. The tool is embedded within workers’ browsers as well as Microsoft Teams and Outlook programs to make it readily available.

    Understandably, Huberty says she is often asked if AI could ultimately replace the analysts who are creating the reams of research published under Morgan Stanley’s banner.

    “I don’t see in the near future a path to just having the machine write the research report to generate the idea,” she said. “I really think that it’s humans who make the call and own the relationship, which is a really important part of the analyst job, or sales and trading job, or corporate banker job.”

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  • German court rules against Deutsche Bank in Postbank acquisition lawsuit

    German court rules against Deutsche Bank in Postbank acquisition lawsuit

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    Deutsche Bank offices in the City of London on July 2, 2024, in London, U.K. 

    Mike Kemp | In Pictures | Getty Images

    Cologne’s higher regional court on Wednesday ruled against Deutsche Bank in a long-standing legal dispute with shareholders who alleged the lender underpaid in its multi-stage acquisition of German retail bank Postbank.

    The 13 plaintiffs in the case claimed that Postbank, which Deutsche Bank acquired over several interest purchases from Deutsche Post, was worth more than the 25 euros ($27) per share paid in 2010.

    The investors, 13 plaintiffs who are former shareholders of Deutsche Postbank (Postbank), instead held they were entitled to a significantly higher payment of 57.25 euro per share — the price at which Deutsche Bank bought its initial 30% stake in Postbank, mere days before the collapse of Lehman Brothers and the kickoff of the global financial crisis, which waylaid the takeover.

    Deutsche Bank and Postbank finally merged in 2018.

    Legal suits linked to the transaction have cast a long shadow over the financial prospects of Deutsche Bank, dampening its performance as recently as in the second quarter — when the lender ended its 15-quarter profit streak and booked a loss of 143 million euros on the back of a 1.3-billion-euros provision linked to the Postbank proceeding.

    Deutsche Bank later reached settlements with nearly 60% of plaintiffs in the case in August.

    Earlier in the Wednesday session, the lender reported the release of 440 million euros of litigation provisions in the third quarter, which helped it swing back to a better-than-expected net profit attributable to shareholders of 1.46 billion euros ($1.58 billion) over the period.

    Deutsche Bank said it will now analyze the Wednesday judgement and noted it has booked provisions covering all outstanding claims by the plaintiffs, including interest accrued to date.

    “The Court has not allowed a further appeal to the German Federal Court. Deutsche Bank will assess if to file a non-admission complaint (motion for leave to appeal) after receiving the written reasoning for the decision,” a Deutsche Bank spokesperson said.

    The lender’s shares were down 2.3% at 10:58 a.m. London time.

    — CNBC’s Sophie Kiderlin contributed to this report.

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  • Deutsche Bank swings back to quarterly profit as legal provisions cut, investment banking shines

    Deutsche Bank swings back to quarterly profit as legal provisions cut, investment banking shines

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    A sign for Deutsche Bank AG at a bank branch in the financial district of Frankfurt, Germany, on Thursday, Feb. 2, 2023. 

    Bloomberg | Bloomberg | Getty Images

    Deutsche Bank on Wednesday beat expectations in its return to profit in the three months to September, after snapping its 15-quarter profit streak in the second quarter.  

    Net profit attributable to shareholders came in at 1.461 billion euros ($1.58 billion) over the third quarter, compared with the 1.047 billion euros anticipated in a LSEG poll of analysts.

    Revenue hit 7.5 billion euros, against a LSEG analyst forecast of 7.338 billion euros.

    Other third-quarter highlights included:

    • Profit before tax of 2.26 billion euros, up 31% year-on-year.
    • Provision for credit losses of 494 million euros, up from 245 million euros in same quarter of last year.
    • CET 1 capital ratio, a measure of bank solvency, was 13.8%, up from 13.5% in the second quarter.
    • Return on tangible equity reached 10.2% (or 7.6% if adjusted for the lender’s litigation provisions), up from 7.3% year-over-year.

    Germany’s largest lender had posted a 143-million-euro loss in the second quarter, at the time announcing it would not embark on a second share buyback program this year and factoring in a provision for its long-running lawsuit over its acquisition of its Postbank division. Some 60% of plaintiffs in the litigation, pillared on allegations that Deutsche Bank underpaid for its purchase, have since settled with the German bank in August.

    “We’re looking to turn the page really this year on all of the legacy items that we’ve had over time, because we don’t want to be surprising investors with the type of provision that we had to build in the second quarter,” Deutsche Bank Chief Financial Officer James von Moltke told CNBC’s Carolin Roth on Wednesday.

    The partial release of 440 million euros of litigation provisions in the third quarter helped boost profit, Deutsche Bank said, and the lender has now guided it has applied for a share repurchase — a step previously stalled by the Postbank legal proceedings.

    “We will continue on our path of profitable growth and exceed our original goals for capital distributions to shareholders,” Deutsche Bank CEO Christian Sewing said Wednesday. Von Moltke clarified to CNBC that these are buybacks the bank intends to execute next year.

    The lender also noted revenues from its investment bank divisions rose to 2.5 billion euros, up 11% over the same period of last year, flagging growth in its fixed income and currencies unit. Asset management net revenues were 660 million euros, also 11% higher year-over-year.

    Von Moltke noted that the two divisions gave the bank’s “standout performance” in the third quarter, with the corporate and private banks also doing “what we expected this year, which is dealing with the sort of back-end of the cycle of interest rates, and offsetting the interest rate pressure now with growth in fee and commission income.”

    Touching on the broader macro framework, von Moltke on Wednesday acknowledged some disappointment with the pace of economic recovery in Deutsche Bank’s native Germany and assessed that the third-quarter conditions have carried into the fourth.

    “There’s always a degree of volatility around events like an election that’s coming up in a couple of weeks,” he said with reference to the upcoming vote in the U.S., whose outcome could ripple into foreign currency. “And, of course, a reaction to what expectations are for policy change after the election. So that, to us, is reasonably encouraging.”

    The performance of European lenders has been fortified by a spate of stock buybacks and dividends in recent years — and now faces the pressure of delivering earnings growth to keep pace with the profitability of U.S. peers in an environment of declining interest rates, after the European Central Bank began loosening monetary policy over the summer.

    “Looking back, while the industry has reduced costs and kept credit quality high, the improvement in returns since 2021 appears to be largely owed to rising interest rates,” analysts at McKinsey warned in the consulting firm’s Global Banking Annual Review 2024, flagging that, in order to maintain current ROTE (return on tangible equity) margins, banks would need to trim costs approximately 2.5 times as fast as revenues fall.  

    Deutsche Bank, whose shares have gained nearly 30% this year to date, in February embarked on a sweeping cost-saving push set to lighten the lender’s headcount by 3,500 roles by 2025 — a figure that includes 800 cuts announced in the previous year. The bank said its full-time workforce was now 90,236, after adding 766 staff during the third quarter.

    Market participants are hotly surveying the broader banking sector, after Deutsche Bank distanced itself from the prospect of a long-anticipated merger with domestic rival Commerzbank, which now faces a potential acquisition by Italy’s Unicredit. Von Moltke said Deutsche Bank looks at the potential merger with “equanimity.”

    Other European banks are also due to post third-quarter earnings over the coming days, with Barclays out on Thursday and Swiss giant UBS reporting next week.  

    Correction: This story has been amended to correct the source of a quote from Christian Sewing.

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  • CFPB Director on new consumer banking data rules

    CFPB Director on new consumer banking data rules

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    Consumer Financial Protection Bureau Director Rohit Chopra joins ‘Squawk Box’ to discuss a new rule requiring financial institutions to share customer data with other providers at customer request for free, how the new rule would improve competition in the banking space, privacy protection concerns, and more.

    08:21

    Tue, Oct 22 20247:29 AM EDT

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  • HSBC names Pam Kaur as first female CFO amid major restructuring

    HSBC names Pam Kaur as first female CFO amid major restructuring

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    Aaron P | Bauer-Griffin | GC Images | Getty Images

    HSBC on Tuesday named veteran insider Pam Kaur as its first female finance chief and announced a consolidation of the bank into four business units.

    Kaur is set to assume her post on Jan. 1, according to regulatory filings with the Hong Kong bourse, taking over from interim Chief Financial Officer Jon Bingham. This is the second heavyweight leadership shakeup for HSBC in recent months, after former finance boss Georges Elhedery was named CEO of the group back in July.

    This breaking news story is being updated.

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  • Citi: time to embrace volatility and take positions off ice

    Citi: time to embrace volatility and take positions off ice

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    Citi Private Bank's Toby Gresham lists sectors set to benefit as the interest rate cut cycle begins.

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  • Expect high quality dividend plays in China to continue to outperform: Portfolio Manager

    Expect high quality dividend plays in China to continue to outperform: Portfolio Manager

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    Stanley Tang of Sumitomo Mitsui DS Asset Management discusses the recent policy support coming out of the Chinese authorities and which sector he continues to like.

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  • UBS’ Erika Najarian on Amex Q3 results: Seeing some consumer spend trends decelerate

    UBS’ Erika Najarian on Amex Q3 results: Seeing some consumer spend trends decelerate

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    Erika Najarian, UBS large cap banks and consumer finance analyst, joins ‘Squawk Box’ to discuss American Express’ quarterly earnings results, strength of consumer spending, and more.

    03:38

    Fri, Oct 18 20249:08 AM EDT

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  • After rejecting Google takeover, cyber firm Wiz says it will IPO ‘when the stars align’

    After rejecting Google takeover, cyber firm Wiz says it will IPO ‘when the stars align’

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    LONDON — Cybersecurity firm Wiz is seeking to hit $1 billion of annual recurring revenues next year, the company’s billionaire co-founder Roy Reznik told CNBC, adding that the firm will go public “when the stars align.”

    Wiz makes software that connects to cloud storage providers like Amazon Web Services or Microsoft Azure and scans for everything it stores in the cloud, helping organizations identify and remove risks in their cloud environments. It was founded by four Israeli friends while they served in 8200, the intelligence unit of Israel’s army, and most of Wiz’s engineering personnel are still based in Tel Aviv, Israel.

    Earlier this year, the company rejected a $23-billion acquisition bid from Google, which would have marked the tech giant’s largest-ever takeover. At the time, Wiz CEO Assaf Rappaport said the startup was “flattered” by the offer, but would remain an independent company and aim to list instead.

    Speaking with CNBC at Wiz’s new office space in London, Reznik said that the company has received offers from “many people that want to get their hands on Wiz stock” — but that, while “very flattering,” the firm still thinks it can do it alone by going public.

    “We’ve already broken a few records as a private company, and we believe we can also break a few more records as an independent public company as well,” Reznik said.

    Four-year-old Wiz has raised $1.9 billion in venture capital to date, including $1 billion secured this year in a funding round led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital at a valuation of $12 billion.

    In 2022, Wiz said it had reached $100 million in annual recurring revenue (ARR), up from just $1 million in 18 months. At the time, the startup said it was “the fastest software company to achieve this feat.”

    Reznik, who is the vice president of research and development at Wiz, said the firm now hopes to double from the $500 million of ARR it achieved this year and hit $1 billion in ARR in 2025, which CEO Rappaport cited as a key condition before the company goes public.

    UK expansion

    Wiz has been expanding its presence internationally, with a particular focus on Europe, from where it sources 35% of its revenues. Last month, the firm opened its first European office in London.

    Wiz co-founder discusses the company's expansion into the UK

    “I think the talent here is amazing, and the ecosystem is amazing,” Reznik told CNBC. “We have always been very much involved in Europe — and specifically the U.K. — and I feel like it’s a natural evolvement of Wiz to double down even more here in London and the U.K.”

    The U.K. represents a major growth opportunity when it comes to cybersecurity, Reznik said, adding that recent events like the cyberattack on National Health Service hospitals and an incident affecting Transport for London have “roof topped” the level of interest in the kinds of products Wiz offers.

    “The cloud market is going to reach $1 trillion over the next next few years,” Reznik, who moved from Israel to the U.K. just three months ago, told CNBC. “This year is going to be around $700 million, while security is just 4% out of that, I would say. So that makes it a $30 billion market, which is huge.”

    Speaking about the U.K. market, Reznik said: “We see a lot of interest here. Many of the largest banks and retailers, are Wiz customers. But we’re also seeing a huge potential for growth.”

    Wiz’s customers include online retailer ASOS and digital bank Revolut as customers in the U.K.

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  • Rankings the banks on AI: Here’s what to know

    Rankings the banks on AI: Here’s what to know

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    Alexandra Mousavizadeh, Evident co-founder and CEO, joins 'Squawk Box' to discuss the adoption of AI by the banking sector, which bank came out on top of the ranking, AI use cases in the industry, and more.

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  • CNBC Daily Open: Strong earnings, macro conditions propelling stocks up

    CNBC Daily Open: Strong earnings, macro conditions propelling stocks up

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    The Morgan Stanley headquarters in New York, US, on Wednesday, Dec. 27, 2023.

    Angus Mordant | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Markets rise on upbeat earnings
    U.S. stocks     resumed their advance Wednesday, as Morgan Stanley and United Airlines earnings topped estimates. Asia-Pacific markets traded mixed Thursday. The CSI 300 real estate index fell nearly 7% even as Beijing announced new measures to support the industry.

    Follow Decision Time for the ECB live
    Market watchers are expecting the European Central Bank to cut rates by 25 basis points at its meeting later today. If that projection pans out, it’d be the third time the ECB’s cutting rates this year. Catch today’s action on Decision Time, CNBC’s live show analyzing the decision, starting 1 p.m. BST.

    New support measures for real estate
    China’s housing ministry said Thursday it’ll broaden its “whitelist” initiative to all commercial housing projects, which aims to complete the construction of unfinished homes. The ministry also announced that bank loans to developers will be speeded up and nearly double to 4 million trillion yuan by the end of 2024, from the 2.23 trillion yuan already approved.

    Potential probe of Intel
    Intel is potentially facing a security review by the Cybersecurity Association of China. Officials allege that Intel’s CPU chips possess vulnerabilities in security management and flaws in product quality. CSAC also accused Intel of using remote management features to surveil users.

    [PRO] A shining sector that’s not tech nor utilities
    Big Tech stocks, fueled by excitement over generative artificial intelligence, have been responsible for most of this year’s rally in the market. Gen AI is powered by energy-hungry data centers, which benefits the utilities sector. But there’s a new group of stocks that’s fast becoming one of the best-performing sectors for the year.

    The bottom line

    The pullback in stocks on Wednesday was brief, like a marathoner pausing to drink before pounding the road again.

    “Yesterday’s weakness does not change the intermediate and long-term uptrends, and we believe it will prove to be just a pullback within the context of a longer-term uptrend,” Piper Sandler said in a note.

    After dipping from its 43,000 level on Tuesday, the Dow Jones Industrial Average rose 0.79% Wednesday to break that barrier again, closing at 43,077.70.

    The S&P 500 climbed 0.47% and the Nasdaq Composite added 0.28%.

    Markets are basking in the glow of a positive earnings season so far. Around 80% of the 50 S&P companies that have posted earnings have topped expectations, according to FactSet data.

    Morgan Stanley, for one, reported third-quarter figures that surpassed earnings and revenue estimates. The bank’s profit jumped 32% from a year ago, far outstripping the LSEG estimate and topping several other big banks’ income growth.

    The investment banking business was a main source of profit for Morgan Stanley. Supported by the U.S. Federal Reserve beginning its rate-cutting cycle, initial public offerings and mergers and acquisitions are emerging from hibernation, injecting fresh life into Wall Street banks.

    Morgan Stanley popped 6.5% after results. The SPDR S&P Bank ETF has jumped more than 6% over the past five trading days. In another sign of the rally broadening, the banking ETF has outstripped the S&P 500’s climb of less than 1% during the same period.

    “We anticipate the macroeconomic and earnings environments to remain favorable,” UBS says, “which supports staying invested in equities.”

    With monetary policy easing, the economy staying strong and inflation cooling — import prices dipped 0.4% for September, according to the U.S. Labor Department — stocks look like they have stamina to keep going higher.

    – CNBC’s Hugh Son, Alex Harring, Jeff Cox, Lisa Kailai Han and Jesse Pound contributed to this story.    

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  • CNBC Daily Open: Strong earnings, macro conditions driving stocks higher

    CNBC Daily Open: Strong earnings, macro conditions driving stocks higher

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    The Morgan Stanley headquarters in New York, US, on Monday, Oct. 14, 2024. 

    Michael Nagle | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    The bottom line

    The pullback in stocks on Wednesday was brief, like a marathoner pausing to drink before pounding the road again.

    “Yesterday’s weakness does not change the intermediate and long-term uptrends, and we believe it will prove to be just a pullback within the context of a longer-term uptrend,” Piper Sandler said in a note.

    After dipping from its 43,000 level on Tuesday, the Dow Jones Industrial Average rose 0.79% Wednesday to break that barrier again, closing at 43,077.70.

    The S&P 500 climbed 0.47% and the Nasdaq Composite added 0.28%.

    Markets are basking in the glow of a positive earnings season so far. Around 80% of the 50 S&P companies that have posted earnings have topped expectations, according to FactSet data.

    Morgan Stanley, for one, reported third-quarter figures that surpassed earnings and revenue estimates. The bank’s profit jumped 32% from a year ago, far outstripping the LSEG estimate and topping several other big banks’ income growth.

    The investment banking business was a main source of profit for Morgan Stanley. Supported by the U.S. Federal Reserve beginning its rate-cutting cycle, initial public offerings and mergers and acquisitions are emerging from hibernation, injecting fresh life into Wall Street banks.

    Morgan Stanley popped 6.5% after results. The SPDR S&P Bank ETF has jumped more than 6% over the past five trading days. In another sign of the rally broadening, the banking ETF has outstripped the S&P 500’s climb of less than 1% during the same period.

    “We anticipate the macroeconomic and earnings environments to remain favorable,” UBS says, “which supports staying invested in equities.”

    With monetary policy easing, the economy staying strong and inflation cooling — import prices dipped 0.4% for September, according to the U.S. Labor Department — stocks look like they have stamina to keep going higher.

    – CNBC’s Hugh Son, Alex Harring, Jeff Cox, Lisa Kailai Han and Jesse Pound contributed to this story.    

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  • We’re bending our investment rules and starting positions in 2 of our Bullpen stocks

    We’re bending our investment rules and starting positions in 2 of our Bullpen stocks

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  • We’re raising our Morgan Stanley price target after a post-earnings stock surge to record highs

    We’re raising our Morgan Stanley price target after a post-earnings stock surge to record highs

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    Bing Guan | Bloomberg | Getty Images

    Morgan Stanley shares soared to all-time highs Wednesday after third-quarter beats on the bank’s top and bottom lines, with strength seen across the board.

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