Tuesday April 19, 2016

// April 19th, 2016 // Daily News

Wall Street banking revenue is in free-fall, and here’s why

CNBC.com

Fixed income, currencies and commodities trading declines hit Wall Street hard in a volatile first quarter.
Goldman Sachs reported first-quarter earnings Tuesday morning that while crossing a low bar also saw a 47 percent drop in fixed income, currencies and commodities, or FICC, to $1.66 billion year-over-year. It was part of a report that showed revenue growth tumbling 40 percent, from $10.62 billion from the year-ago period to $6.34 billion in the first three months of 2016.
With growing uncertainty on the horizon in the second quarter, the FICC struggle could continue. In part thanks to more central banks embracing negative interest rates, S&P Global Markets Intelligence equity analyst Kenneth Leon said more FICC pain could continue on Wall Street in 2016.
“If there were an area to come back, it would be equities trading first,” he said.
Morgan Stanley’s trading revenue from debt, currencies and commodities saw revenue plunge more than 50 percent to $873 million, the bank said in its earnings announcement Monday.
Equities trading also slid year-over-year at each bank, but not nearly as much.
Morgan Stanley said in its earnings the drop reflects “lower levels of client activity in rates and foreign exchange and a challenging credit environment,” as well as the divestiture of commodity businesses.
Other banks that reported earnings last week saw their FICC desks plagued by similar problems. FICC desks’ challenges stem from a number of issues to start 2016: their relative out-performance in the first quarter a year ago, central banks’ maintenance of low interest rates and international instability.
JPMorgan Chase revealed a decline of 13 percent in fixed income markets and Bank of America said last week it saw FICC fall 17 percent. Each saw equities trading businesses post a stronger quarter than their FICC businesses.
Bank of America CFO Paul Donofrio said he thinks the second quarter is starting off far better than the first, but that volatility still could remain ahead. In late June, the UK vote on potentially exiting the European Union could again vex markets.
“March felt, I think, a lot better than certainly January and February,” he said last week on the bank’s earnings call, adding, on the Brexit, “there’s going to be volatility potentially around the vote and around any changes after the vote.”
Citigroup also saw an 11 percent drop in fixed income markets trading compared to the previous year, the bank announced in its earnings. While Citi’s FICC losses were lower than other banks’, it saw greater losses in equities trading, an anomaly for the quarter.

Today’s Inspiration

Avoid Worldly Competition

by Joyce Meyer – posted April 19, 2016

Let us not become vainglorious and self-conceited, competitive and challenging and provoking and irritating to one another, envying and being jealous of one another.
—Galatians 5:26

According to the world’s system, the best place to be is ahead of everyone else. Popular thinking would say that we should try to get to the top no matter who we have to hurt on the way up. But the Bible teaches us that there is no such thing as real peace until we are delivered from the need to compete with others.

Even in what is supposed to be considered “fun games,” we often see competition get so out of balance that people end up arguing and hating one another rather than simply relaxing and having a good time together. Naturally, human beings don’t play games to lose; everyone is going to do his best. But when a person cannot enjoy a game unless he is winning, he definitely has a problem—possibly a deep-rooted one that is causing other problems in many areas of his life.

We should definitely do our best on the job; there is nothing wrong with wanting to do well and advance in our chosen professions. But I encourage you to remember that promotion for the believer comes from God and not from man. You and I don’t need to play worldly games to get ahead. God will give us favor with Him and with others if we will do things His way (see Proverbs 3:3-4).

What God does for you or for me may not be what He does for someone else, but we must remember what Jesus said to Peter, “Don’t be concerned about what I choose to do with someone else—you follow Me” (see John 21:22).

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