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Yahoo
21-05-2025
- Business
- Yahoo
Europe gains traction amid doubts over US assets, global money managers say
By Iain Withers and Sinead Cruise LONDON (Reuters) -Asset managers at Goldman Sachs and JPMorgan are fielding more investor enquiries about the resilience of U.S. assets and helping clients move more money to Europe ahead of more potential trade-related market turmoil, executives said. The clock is ticking on President Donald Trump's 90-day pause on "reciprocal" tariffs that threaten to upend global trading ties and deepen the trade conflict between the world's biggest superpowers. U.S. assets plummeted in April after economists slashed odds on the likelihood of a U.S. recession, leading some investors to seek refuge in perceived safe havens, such as gold and relatively undervalued European stocks and bonds, executives said during separate media events held in London this week. Markets have rallied back since Trump eased many of the tariffs but that has only partially restored confidence, executives said. Some investors have begun hedging the dollar, taking profits on U.S. companies, allocating more capital to Europe and Asia, and holding more cash, they said. "I would say the average client is looking to maybe trim (U.S.) exposure, just a little bit, put a little bit more into Europe, maybe a little bit more into Asia," said Matt Gibson, head of the client solutions group at Goldman Sachs Asset Management. "Everyone is thinking. Some are acting. But nobody that I have seen is full-out exiting the U.S.," Gibson said, flagging client queries on whether a U.S. stock market boom led by the so-called Magnificent 7 of top tech stocks had "run its course". Investors in Europe have flipped their preference from U.S. to European-focused exchange-traded funds (ETFs) so far this year, according to Morningstar data shared with Reuters, as they diversified portfolios amid unpredictable U.S. policymaking. European equity ETFs have pulled in 34 billion euros ($38.6 billion) of additional cash over the year to May 16, four times the 8.2 billion euros put in U.S. equity funds. In 2024, net flows into U.S. equity funds in Europe had dominated by a ratio of more than 8:1 over locally-focused products. Executives at JPMorgan Asset Management also said they had seen stronger client interest in Europe, including investments in private assets, as countries, such as Germany unveiled bigger spending plans. "We are certainly getting more questions about investing in Europe," said Brandon Robinson, deputy global head of private markets. Goldman Sachs Asset Management has been discussing with clients how to put asset and currency hedges back into portfolios to mitigate risks, multi-asset co-Chief Investment Officer Alexandra Wilson-Elizondo said. ($1 = 0.8820 euros)
Yahoo
21-05-2025
- Business
- Yahoo
Europe gains traction amid doubts over US assets, global money managers say
By Iain Withers and Sinead Cruise LONDON (Reuters) -Asset managers at Goldman Sachs and JPMorgan are fielding more investor enquiries about the resilience of U.S. assets and helping clients move more money to Europe ahead of more potential trade-related market turmoil, executives said. The clock is ticking on President Donald Trump's 90-day pause on "reciprocal" tariffs that threaten to upend global trading ties and deepen the trade conflict between the world's biggest superpowers. U.S. assets plummeted in April after economists slashed odds on the likelihood of a U.S. recession, leading some investors to seek refuge in perceived safe havens, such as gold and relatively undervalued European stocks and bonds, executives said during separate media events held in London this week. Markets have rallied back since Trump eased many of the tariffs but that has only partially restored confidence, executives said. Some investors have begun hedging the dollar, taking profits on U.S. companies, allocating more capital to Europe and Asia, and holding more cash, they said. "I would say the average client is looking to maybe trim (U.S.) exposure, just a little bit, put a little bit more into Europe, maybe a little bit more into Asia," said Matt Gibson, head of the client solutions group at Goldman Sachs Asset Management. "Everyone is thinking. Some are acting. But nobody that I have seen is full-out exiting the U.S.," Gibson said, flagging client queries on whether a U.S. stock market boom led by the so-called Magnificent 7 of top tech stocks had "run its course". Investors in Europe have flipped their preference from U.S. to European-focused exchange-traded funds (ETFs) so far this year, according to Morningstar data shared with Reuters, as they diversified portfolios amid unpredictable U.S. policymaking. European equity ETFs have pulled in 34 billion euros ($38.6 billion) of additional cash over the year to May 16, four times the 8.2 billion euros put in U.S. equity funds. In 2024, net flows into U.S. equity funds in Europe had dominated by a ratio of more than 8:1 over locally-focused products. Executives at JPMorgan Asset Management also said they had seen stronger client interest in Europe, including investments in private assets, as countries, such as Germany unveiled bigger spending plans. "We are certainly getting more questions about investing in Europe," said Brandon Robinson, deputy global head of private markets. Goldman Sachs Asset Management has been discussing with clients how to put asset and currency hedges back into portfolios to mitigate risks, multi-asset co-Chief Investment Officer Alexandra Wilson-Elizondo said. ($1 = 0.8820 euros) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-04-2025
- Business
- Yahoo
Europe's major banks signal caution as ominous outlook tempers profit wins
By Sinead Cruise and Tommy Reggiori Wilkes LONDON (Reuters) -Big European lenders are retaining ambitious performance targets after bumper first-quarter profits this week, but beyond the upbeat headline numbers, bank bosses are contemplating a welter of threats to their future earnings prospects. A global trade war unleashed by U.S. tariffs, the highest in a century, has prompted some economists to raise the odds on recession, with about 40 companies worldwide pulling or lowering their forward guidance in the first two weeks of the first-quarter earnings season, a Reuters analysis showed. With only a handful of data points tracking the early impact of U.S. President Donald Trump's tariff plan, most banks have held firm to shareholder payouts and profitability objectives but customers are already showing caution and provisions against bad loans are making a comeback. "While it's too early for lenders to make strategic shifts, the rise in bad loans is a clear warning sign," said Douglas Grant, CEO of financial services company Manx Financial Group. Grant said slowing GDP growth, rising wage costs, and geopolitical instability were already pushing small businesses to cut investment, scale back growth plans and preserve cash. European banks have enjoyed a run of record profits and soaring share prices for the past two years, and investors have quickly pushed their shares back towards multi-year highs after a dramatic dip in early April. Deutsche Bank produced a 39% rise in first-quarter profit on Tuesday after its investment bank's bond and currency trading revenue surged. But the results included a hit from a large single-loan writedown and provisions for the possible impact of tariffs on clients. Britain's Barclays on Wednesday also highlighted intense financial market activity as a driver of higher investment banking income. At UBS, trading revenue increased 32% to $2.5 billion in the three months to end-March. 'UNPREDICTABLE' Several banks surpassed analyst expectations in the first three months of the year but future customer appetite for risk is becoming harder to read. "There was some activity in response to the big market catalyst that we saw at the very beginning of April, but there is more and more uncertainty getting priced in," said UBS Chief Financial Officer Todd Tuckner. CEO Sergio Ermotti said the economic outlook was "particularly unpredictable", with corporate dealmaking on hold, although not yet cancelled. Although also beating analyst expectations, HSBC on Tuesday raised the spectre of lower loan demand and an erosion in credit quality due to the broader tariff fallout. Barclays CEO C.S. Venkatakrishnan struck a similarly sober tone. "...We have to protect ourselves, as we always do with active risk management," Venkat told reporters. "We have long established programmes to transfer and hedge with, and we will continue to do so as warranted by this environment." DOMESTIC LENDING With global trade uncertainty likely to dampen returns from trade finance and lending to multinational corporate customers, some banks are betting on resilient domestic consumer lending businesses to help weather any downturn. Spain's Santander said profit at its retail business, and its corporate and investment banking division, rose 24% and 13% respectively, offsetting weaknesses in Mexico and Brazil. In France, retail banking and equities trading boosted Societe Generale. The CEO of BNP Paribas said last week that the bank was preparing to capitalise on opportunities arising from a slowdown such as M&A and restructuring activities as well as Europe's drive to revive economic growth and increase defence spending. (Additional reporting by Mathieu Rosemain, Stefania Spezzati, Ariane Luthi, Lawrence White and Jesus Aguado. Editing by Jane Merriman)
Yahoo
30-04-2025
- Business
- Yahoo
Barclays beats first-quarter forecasts as Trump turmoil supercharges trading
By Lawrence White and Sinead Cruise LONDON (Reuters) -Barclays booked a stronger than expected 19% increase in first-quarter profit on Wednesday, as trading activity surged in the early months of U.S. President Donald Trump's tenure and the bank made progress on boosting its share of the lucrative UK lending market. The British bank's profit before tax for January-March was 2.7 billion pounds ($3.62 billion), up from 2.3 billion a year ago and above analysts' forecasts for 2.5 billion, according to LSEG data. Income at the investment bank rose 16% from a year ago to 3.9 billion pounds, above analysts' forecasts for 3.5 billion. The bank's results beat forecasts thanks to better than expected income generation in its investment bank, albeit the gains would be tempered by concerns about tariff impacts on the economy, analyst Gary Greenwood at Shore Capital said. Barclays' shares rose 0.3% in early trading, and have more than recovered from a 7% loss earlier this month following Trump's initial burst of tariffs on April 2. The update from the Britain and U.S.-focused lender showed some progress on plans to deliver more stable returns, after years of restructuring and wild swings in its investment bank's performance. Under CEO C.S. Venkatakrishnan, Barclays is trying to bolster earnings by cutting costs and putting more focus on its domestic British lending business. Barclays reiterated its performance goals for the year, and lifted guidance for 2025 income to above 12.5 billion pounds from a previous forecast of 12.2 billion, spurred by expected growth at its domestic division where it has been competing hard for mortgage and consumer lending business. But economic uncertainty from the tariffs prompted the bank to set aside an additional 91 million pound charge against potential future losses, mainly in its U.S. consumer bank and investment bank. CEOs of British banks have urged the UK finance ministry to ditch crisis-era ringfencing rules separating consumer lending operations from more volatile investment banking, but Venkat pledged support for the existing regulation. "The most important part of that regime is actually the one that protects millions of people and the cash that they leave the banks and small companies as well," he told reporters. "I come on the side of the positive protection, and I therefore come on the side of no change in the ringfencing regime." WALL STREET SAYS WORSE TO COME The strong performance from Barclays' investment bank matched U.S. rivals that have reported bumper profits so far this year. Barclays said income from its fixed income trading rose 21%, better than an average of 6% among the top five Wall Street banks, as its securitised products and interest rates-related businesses performed strongly. But Barclays' equities income rose 9% versus an average 32% for the top five U.S. players, Bank of America, Citi, Goldman Sachs, JPMorgan and Morgan Stanley. Wall Street bank bosses have warned that the outlook for the rest of the year is murkier, as trade tensions threaten rising inflation and possibly a recession. Capital productivity at Barclays' investment bank, watched closely by investors as the bank progresses its new three-year strategy to shift resources to its domestic unit, rose 1.2 percentage points to 7.7%, Finance Chief Anna Cross said. "Five quarters into our three-year plan, we remain on track to deliver our goals," CEO Venkatakrishnan told reporters on a conference call. ($1 = 0.7469 pounds)
Yahoo
30-04-2025
- Business
- Yahoo
Barclays posts 19% rise in Q1 profit, beating expectations
LONDON (Reuters) -Barclays reported its first quarter profit rose a better than expected 19% on Wednesday, as frenzied customer activity in the first three months of the year boosted fixed income trading revenue and dealmaking fees. The British bank reported profit before tax for January-March of 2.7 billion pounds ($3.62 billion), up from 2.3 billion pounds a year ago and above analysts' forecasts for 2.5 billion pounds according to LSEG data. Income at the lender's investment bank rose 16% from a year ago to 3.9 billion pounds in the first quarter, above analysts' forecasts for 3.5 billion pounds. ($1 = 0.7469 pounds) (Reporting By Lawrence White, editing by Sinead Cruise) Sign in to access your portfolio
