Opening Bell: 1.14.16

JP Morgan beats expectations; Mike Mayo expects activists to target banks; "Sleazy dirtbags run Silicon Valley"; Australian man stops car theft with flying kick through passenger window; and more.
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J.P. Morgan’s Earnings Rise, Hit Annual Record (WSJ)
Cost-cutting and higher earnings within the lender’s investment banking division drove fourth-quarter profit about 10% higher to $5.43 billion, or $1.32 a share. Analysts polled by Thomson Reuters had expected earnings of $1.25 a share. Revenue rose slightly to $23.75 billion and also beat expectations. For the year, J.P. Morgan earned $24.44 billion, an all-time record for the bank that exceeded 2014 earnings of $21.76 billion, which was then a record. The result rivaled Citigroup Inc.’s earnings before the financial crisis of $24.59 billion in 2005.

Banks’ falling book value could invite activists (CNBC)
A group of U.S banks including Goldman Sachs, Morgan Stanley and Bank of America saw shares drop by at least 8 percent to begin this year. Each bank also trades below tangible book value, or the net value of the company less intangible assets and goodwill. With the stocks' value dipping beneath book value and earnings reports from U.S. banks due this week and next, underperforming banks could see activist investors clamoring for leadership changes or for spinouts at firms posting disappointing returns. "If valuations stay depressed as they are it creates incentive for banks to unlock value," CLSA banks analyst Mike Mayo said. "Shareholders have every right to push for a credible plan."

Sleazy dirtbags run Silicon Valley (NYP)
Sixty percent of the women working in Silicon Valley have endured unwanted sexual advances, and nearly two-thirds of those women said the harassment came from a supervisor, according to a new survey. Horror stories ran the gamut, from getting groped in public by a boss to employers that hosted lunches at Hooters, according to the survey published this week, titled “Elephant in the Valley.” One respondent said a hiring manager “clearly indicated that if I slept with him, he would make sure I was promoted as his ‘second in command,’ ” according to the survey.

Australian man stops car theft with flying kick through passenger window (UPI)
An Australian man stopped his car from being stolen by performing a flying "ninja" kick through the passenger window of the moving vehicle. Northern Territory Police said on Facebook they were seeking Timothy Slater, 24, for alleged offenses including an attempted auto theft Nov. 30 at a gas station in Malak. Video of the gas station incident shows a man police identified as Slater getting into the car and attempting to drive away after the owner walked away from the vehicle. The owner quickly runs back into frame as Slater tries to drive off and performs a flying kick through the passenger-side window the moving car. The man then climbs into the car, leading Slater to flee.

AB InBev sees record demand for bond deal (FT)
Anheuser-Busch InBev has pulled in more than $110bn of demand for an upsized $46bn bond deal, as investors rushed to pile their cash into the relative safety of high-grade US corporate debt at the start of a turbulent new year for markets.

Chocolate Makers Fight a Melting Supply of Cocoa (WSJ)
Demand for chocolate is stronger than ever, especially now that more consumers in China and India are buying bars and bonbons long considered an unaffordable luxury. But cocoa production is down, including a steep slide last year in Ghana, the second-largest cocoa-growing country. Cocoa prices have jumped nearly 40% since the start of 2012.

California Lottery: Powerball winners in Calif., Florida, Tennessee (CNBC)
None of the winners' identities have yet been revealed, although in Chino Hills, crowds descended on the 7-Eleven store that sold the winning ticket. The store gets a $1 million bonus for the making the lucky sale.

Ohio man who sent selfie to police arrested in Florida (Reuters)
An Ohio man wanted for drunk driving who sent police a more flattering photo of himself because he did not like his mug shot has been arrested in Florida, police said. "How's this photo Donald Pugh?" asked the Escambia County, Florida, Sheriff's Office on its Facebook page, showing the suspect's new, broadly smiling mug shot. "Maybe that selfie helped people identify you better?" Pugh, 45, had posted a photo of himself wearing sunglasses in a car after he saw the two mug shots that the Lima, Ohio, police department had posted on its Facebook page. "Here is a better photo that one is terrible," Pugh wrote when he sent in the selfie. Pugh was arrested in Century, Florida, on Tuesday morning thanks to a tip, the Escambia County Sheriff's Office said.

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Citi's Pandit Quits Amid Board Clash (WSJ) The shake-up amounts to an extraordinary flexing of boardroom muscle at Citigroup, a company that until recently had a board stocked with directors handpicked by former CEO Sanford Weill who rarely challenged management decisions. The action raises questions about whether the sprawling Citigroup empire ultimately will be dramatically pared back or broken up, something Mr. Pandit opposed. When it was formed in 1998, Citigroup was envisaged as the prototype of the modern bank, a "financial supermarket" with tentacles in all areas of lending, securities and deposits. Its creation helped spark the end of the Depression-era Glass Steagall Act separating securities and banking. Citigroup's New CEO Has A Lot To Tackle (Fortune) Corbat is a Connecticut native. He is listed as the owner of a 4-bedroom, 1-and-a-half-bath, 3,500 square foot Manhattan apartment on Central Park West. The apartment has a fireplace and exposed wood beams in the living room. But Corbat doesn't appear to live there. According to the real estate website Streeteasy, the apartment was rented out in March for $33,000 a month. Corbat also owns a house in 6,300 square foot house in Wilson, Wyoming. That house was estimated to be worth $3.7 million in 2010, according to real estate website Trulia. Pay seems to be part of the reason for Pandit's department. Earlier this year, shareholders voted to reject a $15 million pay package for the Citi's former CEO. Corbat said he will take $1.5 million as a base salary, plus a bonus to be determined later. RBS Exits Government Insurance Plan (WSJ) RBS said it has struck a deal with the U.K. Treasury to exit the government's Asset Protection Scheme, effective Thursday, the earliest date possible under the terms of the contract. The program was crafted at the height of the financial crisis in an effort to shield banks by insuring their assets after the lenders absorbed an initial loss. The insurance program is now considered largely unnecessary because many of RBS's insured assets have been sold or written off. The bank, which is 81% government-owned, will have paid £2.5 billion ($4.03 billion) in fees for its participation in the APS without having made a claim, in addition to about £1.5 billion paid to the Treasury for support received during the financial crisis. Passenger Jet In Low Altitude Search (Australian) An Air Canada jet descended from 38,000ft to as low as 3700ft (1128m) to allow passengers to look for a yacht missing off the NSW coast. The Boeing 777 flying from Vancouver to Sydney joined an Air New Zealand Airbus A320 in the initial search for the damaged boat. Captain Andrew Robertson said the airline was approaching top of descent and talking to air traffic control in Brisbane at 8.18am when it was asked to assist in the search. The flight crew programmed the coordinates ofthe stricken yacht into the aircraft's flight computer and determined it was about 160 nautical miles (296km) further out from the coast than the 777 but that the aircraft was enough fuel to reach the location.. "We were at 38,000ft and we just kept going down," said Captain Andrew Robertson. "I knew we would have to get really low and we got down to 5000ft above the water as we approached the area. "I had already made a PA announcement telling passengers what we were doing and as we got into the area, I said: "We're coming into the search area, please everybody look out to the window and if you seen anything let us know. Norway’s Housing Boom Could Lead to Spain-Style Bust, Say Some (CNBC) Norway’s housing sector, which has seen prices jump by almost 30 percent since 2006 — could end up replicating a pattern of housing booms and busts seen across the globe, from the U.S. to Japan to Spain and Ireland, according to a report by Bank of New York Mellon. Indeed, Norway's house price rise has been so dramatic that the Federal Reserve Bank of San Francisco wrote a paper on the subject in June that made parallels between the lead up to the U.S. housing crisis and the “irrationally exuberant bubble” of Norway’s present boom. BlackRock Profit Rises 7.9% on as Assets Rise on ETFs (Bloomberg) Net income climbed 7.9 percent to $642 million, or $3.65 a share, from $595 million, or $3.23, a year earlier, the New York-based company said today in a statement. Excluding certain one-time items, profit of $3.47 per share exceeded the $3.32-a- share average estimate of 19 analysts surveyed by Bloomberg. Knight Capital Posts Third-Quarter Loss Due To Fallout Over Software Glitch (AP) The company company reported a loss attributable to common shareholders of $764.3 million, or $6.30 per share, for the period ended Sept. 30. That compares with net income of $26.9 million, or 29 cents per share, a year ago. Knight Capital said Wednesday that the loss from the software glitch was more than $400 million. Excluding $2.46 per share related to the software glitch and other items, earnings came to a penny per share. Analysts forecast 2 cents per share, according to a FactSet survey. Police: Alanis Morissette Music Leads To Domestic Violence (N4J) A 24-year-old Jacksonville man who didn't like his boyfriend's taste in music let him know about it by hitting him in the face with a plate, according to the Jacksonville Sheriff's Office. Police said 33-year-old Todd Fletcher has a large cut on the side of his face to prove it. Allen Casey was arrested Sunday after police said he acted on his displeasure that Fletcher was listening to Alanis Morissette. "That's all that (expletive) listens to," Casey said, according to a police report.

By Paul Elledge Photography [CC BY-SA 3.0], via Wikimedia Commons

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