The chief executives of Goldman Sachs and Morgan Stanley yesterday said they were seeing “green shoots” in their struggling investment banking businesses.
Speaking at an industry conference organised by Morgan Stanley, the bank’s chief executive James Gorman said: “We’re clearly seeing more green shoots. I’m having more discussions with CEOs.”
Gorman, who plans to step down as chief executive within the next 12 months, said it was “unlikely” Morgan Stanley would pursue any further large-scale dismissals in the near future after it announced several thousand job cuts last month.
Goldman Sachs chief executive David Solomon told CNBC he was also seeing “green shoots” and that he would expect to see activity in the capital markets pick up at the turn of the year.
“I would expect capital markets activity to pick up as we head into 2024. At the end of the day, people need capital, they can defer some of those activities but at the end of the day, they can’t postpone them indefinitely.”
Investors appeared to share the executives’ optimism. Yesterday the S&P 500 closed at its highest level for more than a year, powered by a rally in large tech stocks.
Here’s what else I’m keeping tabs on today:
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Trump indictment: Donald Trump will become the first former US president to face federal charges in a courtroom in Miami today. Here’s what to expect.
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Economic data: Annual consumer price rises are expected to have slowed last month to the lowest level in more than two years, according to economists’ predictions.
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Monetary policy: The Federal Reserve is expected to pause interest rate rises at the end of its two-day policy meeting which starts today.
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UK Covid inquiry: A public inquiry into the UK’s response to the Covid-19 pandemic that is expected to last until at least 2026 kicks off with its first public hearing.
The FT Women in Business Summit Europe goes live online and in London today. Hear from leaders at BP, Beauty Pie, Harvey Nichols and more.
Five more top stories
1. The two-year yield on UK government bonds surged this morning to their highest level since 2008. Strong UK wage growth data heightened investors’ concerns about stubborn inflation. The pound was also higher, rising to $1.256. Read more
2. The US Federal Trade Commission has asked a federal court in California to stop Microsoft from closing its $75bn acquisition of Activision Blizzard. The deal is in serious jeopardy after the UK’s competition regulator blocked the agreement in April. Read more on why the move piles pressure on the gaming industry’s biggest deal.
3. Defaults in the $1.4tn US junk loan market have climbed sharply this year, as the Federal Reserve’s aggressive campaign of interest rate rises increases the pressure on risky companies with “floating” borrowing costs. Read more on the Goldman Sachs analysis of PitchBook data.
4. Bond pioneer Howard Lutnick, who launched the eSpeed electronic trading platform in the late 1990s, is poised for a third attempt to break CME’s stranglehold on Treasury futures trading. Read more on Lutnick’s plan to shake up the $550bn a day Treasury futures market.
5. JPMorgan Chase yesterday agreed to pay up to $290mn to settle one of two bombshell lawsuits over its 15-year relationship with Jeffrey Epstein. The bank did not admit any liability to the claims of profiting from human trafficking or ignoring multiple internal warnings about their former client’s sex crimes. Read more
Deep dive
Nearly 1.4mn kilometres of metal-encased fibre criss-crosses the world’s oceans, speeding internet traffic seamlessly around the globe. But driven by fears of espionage and geopolitical tensions, the subsea cable market is in danger of dividing into eastern and western blocks, experts say. The FT explores how the US is pushing China out of the infrastructure underpinning the internet in this visual story.
We’re also reading . . .
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Trump and Johnson: The reactions of Boris Johnson and Donald Trump to their latest travails are strikingly similar, writes Gideon Rachman. Both are fabulists for whom the truth is simply what is politically or personally convenient.
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Saudi Arabia gaming: The kingdom is spending billions in a bid to dominate the global games and esports sector as part of its push to diversify beyond oil.
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Obituary: Silvio Berlusconi, the tycoon and former Italian prime minister who has died at the age of 86, wielded power in a manner that defied the conventions of western democracy.
Chart of the day
With Russia’s invasion of Ukraine leading to a sharp increase in defence spending and geopolitical tensions over Taiwan also rising, economists have turned their attention back to an age-old question: how to pay for wars.
Take a break from the news
What’s the best way to see Venice? To escape the crowds of tourists, the FT’s travel editor Tom Robbins drove a rental boat to explore the Italian city and its lagoon in a voyage of unplanned delights and moments of blessed solitude.
Additional contributions by Tee Zhuo and Benjamin Wilhelm
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