BOTH PARTIES WANT TO REIN IN BIG BANKS The Democratic convention has not started with quite the display of unity that Hillary Clinton would have hoped for to stand in contrast to the Republican convention last week, but that’s not the only thing the two parties have in common. Both have inserted the Glass-Steagall rule into their platforms. The act has only a slim chance of returning and it would probably lead to a loss of jobs as lending slows, Andrew Ross Sorkin writes.
D.R. Horton Inc., the largest U.S. homebuilder, has added affordable homes for seniors to its lineup of brands, which already includes entry-level and luxury properties.
Freedom Homes will begin in Florida, Texas and Arizona and be open in at least eight markets by the end of fiscal 2016, according to a statement Tuesday. The company didn’t provide details on pricing.
D.R. Horton has been having success with its lower-cost Express homes that, while geared to younger people, are gaining popularity with seniors in retiree markets such as Florida, the company said on its earnings conference call last week…
Pacific Northwest region takes over lead in price appreciation
San Francisco led six cities seeing monthly price decreases
Home prices in 20 U.S. cities rose less than projected in May from a year earlier, signaling both buyers and sellers had the potential to benefit during the busy selling season, according to S&P CoreLogic Case-Shiller data reported Tuesday.
- 20-city property values index increased 5.2 percent from May 2015 (forecast was 5.5 percent) after climbing 5.4 percent in the year through April
- National home-price gauge rose 5 percent from 12 months earlier
Ray Dalio, the billionaire founder of the world’s largest hedge fund, Bridgewater Associates, likes to say that one of his firm’s core operating principles is “radical transparency” when it comes to airing employee grievances and concerns.
Sales of new U.S. homes climbed 3.5 percent to a 592,000 annualized pace, the fastest since February 2008, Commerce Department data showed Tuesday in Washington. The median forecast in a Bloomberg survey called for a 560,000 rate. Figures for May were revised higher to a 572,000 pace…
Equity Residential lowers revenue guidance for third time
Landlords contending with more supply, sluggish job growth
Apartment construction in New York and San Francisco is taking its toll on landlords, with Equity Residential, the largest publicly traded U.S. multifamily owner, cutting its revenue forecast for the third time this year.
Equity Residential expects revenue growth from properties open at least a year to be 3.5 percent to 4 percent in 2016, according to the company’s second-quarter earnings statement Tuesday. The Chicago-based real estate investment trust in late April lowered the upper limit to 5 percent, then reduced it again in June to 4.5 percent…
Demand for new houses climbs to more than eight-year high
Consumers more confident about current state of economy
What you need to know about Tuesday’s U.S. economic data:
NEW-HOMES SALES (JUNE)
- Rose 3.5 percent to 592,000 annualized pace (forecast was 560,000), strongest since February 2008
- Regionally, sales up 10.9 percent in West and 10.4 percent in Midwest to highest level since November 2007
- Previously reported decrease in May was revised away, now unchanged at 572,000 rate
- Supply of homes dropped to 4.9 months, leanest since February 2015…
No need to lose sleep over this.
While some think a recession could be looming for the U.S., fresh housing data says the opposite.
Purchases of new U.S. single-family homes just hit their highest level in more than eight years, representing what Wall Street is calling a strong market.
“Today’s report confirms the considerable strength in the housing market over the past few months,” Rob Martin, an economist at Barclays Plc, said in a note. “We expect housing to continue to firm, on average, over the medium term, with a buoyant household sector supporting both prices and volumes.”…
As far as stock investors are concerned, talk of a plunge in Hong Kong property prices is overdone. An index of real estate companies listed in the city has surged 35 percent from a three-year low in January as traders scale back bets for higher U.S. borrowing costs and home prices rebound from a 13 percent slump. Such exuberance has lifted the relative strength index of property stocks to 80.2, far above the 70 level that signals to some traders shares are overbought…
Sales to Chinese buyers fell for the first time since 2011
Capital controls, currency depreciation seen among drags
For David Wong, the business of selling homes isn’t as good this year as it was in 2015, and he’s blaming that on a decline in customers from China.
“The residential-property market here, especially for those priced between $2.5 million to $3 million, has been affected by China’s measures to control capital flight,” said the New York City-based Keller Williams Realty Landmark broker. “You need to cut the price, or it may take a real long time.”…
Purchases of new U.S. single-family homes rose in June to the highest level in more than eight years, indicating a firm and resilient housing market.
Sales increased 3.5 percent to a 592,000 annualized pace, the fastest since February 2008, Commerce Department data showed Tuesday in Washington. Figures for May were revised higher. The median forecast in a Bloomberg survey called for a 560,000 rate.
While the government’s new-home purchase data are subject to big swings from month to month, the broader picture for residential real estate shows steady gains fueled by stable employment and low borrowing costs. Faster wage growth and construction of properties priced for entry-level buyers have the potential of further stoking the market…
Fund reports annual returns as high as 91% since 2013
Meyer guarantees clients will never lose money with his system
Ten miles south of downtown Atlanta, in an anonymous business center overlooking the airport, sits the headquarters of what, on paper, is a hedge-fund powerhouse.
The numbers coming out of the part-time office at One Hartsfield Centre are remarkable: annual returns of 13 percent, 24 percent, even 91 percent since 2013.
Dozens of former Credit Suisse advisers who have been fighting for their deferred compensation after leaving the bank last year scored a partial victory on Friday when the brokerage industry’s main regulator said member firms cannot make workers waive their rights to settle disputes in the regulator’s own arbitration forum.
The advisers had been forced by Credit Suisse to use two other arbitration services they didn’t want. Now the Financial Industry Regulatory Authority says members have the right to request arbitration at Finra “at any time and do not forfeit that right” by signing an agreement saying they must choose otherwise…
Largest lenders may boost provisions for nonperforming loans
Drop in interbank borrowing costs may drag on interest margins
Earnings reports due soon from Singapore’s largest banks may show their second-quarter profits were crimped by higher buffers for soured loans and a faltering rally in domestic interest rates.
Here are five charts illustrating the themes that may emerge out of the reports from DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Banking Ltd.:
Could the Glass-Steagall Act — the Depression-era legislation that forced the separation of investment banking from commercial banking, among other things — be coming back?
Fines, job cuts and anger have taken a toll. Traders and brokers are struggling to adapt to stark new realities.
Chris Hentemann has two pieces of art on the walls of his corner office in midtown Manhattan. One is an oversize photograph of the cockpit of his twin-engine Beechcraft Baron. The other is an Andy Warhol print of Muhammad Ali with his fists cocked.
For Hentemann, a rail-thin money manager who has spent 25 years in finance, the two pictures capture the duality of Wall Street. It’s an industry where you need to manage risk with precision and discipline, but it’s also one driven by audacity, ego and the killer instinct. Or at least it used to be…
12100 Wilshire Blvd., Los Angeles
Los Angeles—In January 2015, visiting officials of the State of Qatar told the U.S. Chamber of Commerce that the country would invest $35 billion in the U.S. over the next five years, and it continues to do just that, with its latest investment being Qatari Investment Authority’s acquisition of the office tower at 12100 Wilshire Blvd. in Los Angeles. QIA, the sovereign wealth fund of Qatar, and joint venture partner Douglas Emmett Inc. recently acquired the 365,000-square-foot property, located in the prestigious Brentwood submarket, from Hines for $225 million.
U.S. race poses ‘clear risks’ to Mexico peso, strategists say
Peso may fall to as low as 22 per dollar should Trump win
Mexico’s peso looks poised for further declines as risks related to the U.S. presidential election increase, Citigroup Inc. said.
Given Republican nominee Donald Trump’s “anti-Mexico rhetoric, the U.S. election presents clear risks to the Mexican peso,” emerging-markets strategists Dirk Willer and Kenneth Lam wrote in a research note published Monday. They recommend buying dollar-call and peso-put options expiring Nov. 10 to bet on further peso weakness, and said the Latin American currency generally offers a good hedge for “Trump risk” in global portfolios…
All 17 economists in survey said rate to remain at 0.1 percent
Central bank is monitoring impact of Brexit vote on exports
The Bank of Israel left its benchmark interest rate near zero, as growth slowed, home prices rose and exporters braced for the impact of the U.K.’s vote to leave the European Union — Israel’s largest trading partner.
The decision to hold the rate at 0.1 percent was forecast by all 17 economists in a Bloomberg survey. The central bank said last month it was closely monitoring developments surrounding the Brexit vote, amid fears it could crimp demand for exports that declined 12.9 percent in the first quarter, excluding diamonds and startups. The bank last changed the rate in February 2015…
Banco Santander SA’s car-financing unit in the U.S. tumbled in New York trading after saying it will delay release of its second-quarter financial report.
Santander Consumer USA Holdings Inc.’s shares fell 15 percent to $10.09 at 9:33 a.m., the most intraday since January 27. The stock declined 25 percent this year through July 22, compared with the 1 percent advance of the Russell 1000 Financial Services Index…
Infor becomes first Canadian SPAC to get required transaction
Element’s board approves split into two separate companies
Infor Acquisition Corp. will become Canada’s first special purpose acquisition company to find a required qualifying transaction after agreeing Monday to participate in the splitting of Element Financial Corp.
Shareholders of Infor will receive shares of Element Financial’s commercial-finance business at fair market value after the unit is carved out of the Toronto-based company, Infor said Monday in a statement. Element Financial, one of North America’s largest equipment-finance firms, said in a separate statement that its board approved a plan to split into two publicly traded companies, and disclosed the agreement with Infor…
Share of companies raising guidance near 12-year high
Bank of America finds investors rewarding stocks that do so
For all the fretting about the recession in U.S. corporate profits, second-quarter results are providing at least one reason for optimism, according to Credit Suisse Group AG. It’s the number of companies raising forecasts for coming quarters, a ratio that has jumped toward a 12-year high.
Elliott Management has just shown a dilettante how activism is done.
Elliott, a hedge fund run by the billionaire Paul Singer, has persuaded the PulteGroup to add three new faces to its board. Pulte, a $7 billion home builder, will also cut investment in new land and buy back more shares. The constructive engagement between the pushy 4.7 percent shareholder and PulteGroup management is in stark contrast to the founder William Pulte’s ham-handed campaign against the soon-to-depart chief executive, Richard Dugas.
Monetary stimulus seen distorting nation’s debt, stock markets
Japan-focused funds sank more than Europe, U.S. peers in June
As one of the world’s biggest investors in hedge funds, it’s Raymond Nolte’s job to find traders who can navigate even the toughest markets. Right now, he doesn’t trust anyone to do that in Japan.
The chief investment officer of SkyBridge Capital has zero exposure to Japan-focused hedge funds, saying that unprecedented monetary stimulus has made the nation’s debt and equity markets too distorted to manage. For Nolte, the situation in Japan is an extreme version of what’s happening around the world as central banks use unconventional measures to spur economic growth…
Here’s a look at what’s coming this week.
Four tech giants to report earnings.
This is a big week for tech company earnings, as Twitter, Facebook, Apple and Alphabet — Google’s parent company — are expected to report their quarterly financials. The theme remains the same for all four companies: to describe how well they are monetizing their mobile customers, whether it is iPhone sales for Apple or the performance of mobile advertising for Facebook, Twitter and Google. Mike Isaac…
Corporate bond buying is the latest craze among central bankers. But don’t expect the Bank of England to follow suit.
Photographer: Chris Ratcliffe/Bloomberg
After being surprised by the lack of an interest rate cut in the U.K. this month, investors shouldn’t be so sure they know what Mark Carney’s next move will be.
The Bank of England Governor will likely spurn the latest fashion among central bankers — buying corporate bonds — according to Citigroup Inc. analysts led by Hans Lorenzen, who said their call jars with market expectations. As they wrote:
KKR, Blackstone among partners for fund that invests globally
CreditEase has 3,200 wealth advisers to distribute products
CreditEase Group, which runs a wealth manager and peer-to-peer lender Yirendai Ltd., is seeking to raise $200 million for a global private equity fund as Chinese individuals step up investing abroad.
The fund allows people on the mainland to tap assets overseas, with investments starting from $150,000, according to Seungha Ku, head of offshore private equity at Beijing-based CreditEase. KKR & Co. and Blackstone Group LP are among the partners for the product, which focuses on consumer, telecommunications, media and technology, health care and industrial businesses in North America, western Europe and developed Asia, he said…
Dollar bond issuance surges to quarterly record $18.7 billion
Shows efforts to limit outflow pressures, RBS economist says
China’s national team is getting bigger.
After stepping into the currency and equity markets repeatedly over the past year to stem declines, government-linked entities are now spurring capital inflows by raising money offshore and bringing it home. Sales of dollar bonds by some of China’s biggest state-run firms rose to a record $18.7 billion in the April-June period, about 80 percent higher than the average of the previous four quarters. In comparison, overall issuance by Chinese companies shrank 11 percent as a weakening yuan drove up the cost of servicing overseas debt…
German lender will report second-quarter earnings on July 27
Deutsche Bank has lost 42% of its market value this year
Deutsche Bank AG’s John Cryan will try to convince investors this week that his efforts to turn around Europe’s biggest securities firm will succeed. It’s a narrative that’s becoming harder to sell.
The quarterly update on Wednesday comes nine months after Cryan announced plans to cut thousands of jobs and shrink risky assets to boost profitability and capital levels. The chief executive officer has since had to put the sale of German consumer lender Deutsche Postbank AG on hold, scrap the development of a “digital bank” and contend with the departure of several senior bankers…
Swedish company in dialogue with U.K. clients, subcontractors
Shares fall as profitability hurt by projects in Poland, U.S.
Skanska AB, the Swedish construction company that built the City of London’s landmark Gherkin building, lowered its outlook for U.K. non-residential construction after the country voted to leave the European Union.
“Ahead of the Brexit vote, private developers were in a wait-and-see mode and refrained from starting projects — that cautiousness has continued after the referendum,” Chief Executive Officer Johan Karlstroem said in a phone interview on Friday. “The worst case scenario is a continued prolonged uncertainty.”…
When Sarah Megan Thomas and Alysia Reiner were pitching “Equity,” their film about female executives on Wall Street, they showed potential backers a video of the way women were typically depicted in finance movies: as demeaned assistants, “background players, hookers, strippers,” Ms. Reiner said. Rarely were women the bosses who made the deals, or even the negotiators who enabled them.
Demand driven by higher end of the market as stocks rise
First-time buyers return, making up highest share since 2012
Sales of previously owned homes unexpectedly climbed in June to the highest level in more than nine years, giving a boost to residential real estate as it approached the end of its busy selling season.
- Contract closings climbed 1.1 percent to a 5.57 million annual rate (forecast was 5.48 million), the most since February 2007
- Sales increased 1.9 percent from June 2015 before seasonal adjustment
Firm to contribute small amount of capital under new rules
Some employees may participate, helping align interests
Goldman Sachs Group Inc. is about to start raising money for its first private-equity fund since the financial crisis, potentially gathering $5 billion to $8 billion, according to a person with knowledge of the matter.
The fund won’t be as large as some of the investment bank’s earlier vehicles, and the firm will contribute a relatively small amount of the capital because of post-crisis restrictions on risk-taking by banks, the person said, asking not to be identified because the plans are confidential…
LONDON — Terra Firma, the European private equity firm founded by the British financier Guy Hands, said on Thursday that it had hired Andrew Geczy, a banker who has worked at several different institutions, as its new chief executive.
Mr. Geczy, who most recently served as chief executive of international and institutional banking at the Australia and New Zealand Banking Group, will join Terra Firma full time in September, the company said.
U.S. home prices rose 5.6 percent in May from a year earlier as buyers competed for a scarcity of listings.
Prices climbed 0.2 percent on a seasonally adjusted basis from April, the Federal Housing Finance Agency said in a report Thursday from Washington. The average estimate of 18 economists was for a 0.4 percent gain, according to data compiled by Bloomberg.
The improving job market and low mortgage rates are fueling competition for housing and driving up values. The inventory of previously owned homes on the market at the end of May fell 5.7 percent from a year earlier, according to the National Association of Realtors…
KCG sees growth for nontraditional foreign-exchange players
Most firms already deal indirectly with nonbanks: Eaton Vance
Be careful what you wish for — that’s the advice from State Street Corp. to the newest market makers in the $5.3-trillion-a-day foreign-exchange market.
As hedge funds and automated-trading firms ramp up their currencies businesses, they’ll probably attract more interest from regulators, said Chip Lowry, senior managing director at State Street Global Markets in Boston, in a conference call Tuesday hosted by Greenwich Associates.
Two office suites were combined to enhance meeting spaces and allow the company to continue to grow.
Burbank, Calif.—Beverage manufacturer Neurobrands recently announced that the renovation process of its corporate office in Burbank is complete. Handled by McCormick Construction, the process combined two separate spaces occupied by the energy and health drink manufacturer to enhance and expand the amount of room it has to further its growth.
Neurobrands corporate office
Denmark’s biggest mortgage bank is warning there’s a risk the housing market may get “out of control,” especially around cities, as long-term negative interest rates make borrowers complacent.
“To be concrete, there is a danger that Danes go blind to the risk of rates ever rising again,” Tore Stramer, chief analyst at Nykredit in Copenhagen, said in an e-mail. “That raises the risk of a major housing price decline, when rates at some point or other start to rise again.”
Ford, GM, Nissan, Tesla join with U.S. government, utilities
U.S. to offer $4.5 billion to back nationwide charging network
The Obama administration will invest as much as $4.5 billion to build electric-car charging stations, creating a network stretching coast-to-coast to reduce “range anxiety” and potentially improve consumer acceptance of the lower-polluting vehicles.
The initiative will release the Energy Department loan guarantees to support a commercial-scale roll out of charging stations, with federal, state and local governments partnering with automakers like Ford Motor Co., General Motors Co., Nissan Motor Co. and Tesla Motors Inc…
Purchases of existing homes climb to more than nine-year high
Unemployment-benefit rolls hover near lowest level in decades
What you need to know about Thursday’s U.S. economic data:
EXISTING-HOME SALES (JUNE)
- Contract closings rose to 5.57 million annual rate (forecast was 5.48 million), the most since February 2007
- First-time buyer share of all transactions rose to 33 percent, the highest since July 2012
- Inventories dwindled by 5.8 percent from a year earlier to 2.12 million units, the lowest for a June since 2001
Come for the view, stay for the private restaurant.
As New York’s luxury market continues to sag, the top end of the condo market is going to increasing extremes to attract a finite number of global elites. With the initial release today of images and information for the three full floors of amenities offered at 432 Park Avenue, buyers have the chance to see just how far the building’s developers are willing to go—call it an arms race in which the weapon of choice is travertine marble.
Investor focus is on bad loans in Italy’s banking system
Lack of pass/fail mark could give deceptive sense of security
Italian banks, whose woes have prompted a debate over state aid, may not be the only ones in the spotlight next Friday when regulators publish their latest health check on Europe’s largest lenders.
Though Italy’s Banca Monte dei Paschi di Siena SpA will probably attract the most scrutiny with its mountains of soured debt, German, Austrian and Nordic banks also may be shown in an unpleasant light when the London-based European Banking Authority sets out its findings…
There’s no room on the waterfront.
Vancouver is one of North America’s hottest real estate markets—a city of million-dollar teardowns that’s become notoriously unaffordable for the young and the middle class. And potential homebuyers aren’t the only ones feeling the squeeze.
The Port of Vancouver, Canada’s biggest, is being hemmed in as property is snapped up for housing, offices, and even movie sets. The regional port authority estimates the region may run out of industrial land within 10 years. This could push some of the port’s$200 billion in trade to rival gateways if related businesses “can’t get a site or can’t do it in an economic way,” says Peter Xotta, vice president for planning and operations for the authority…