Fed Downshift And Bank Earnings Bonanza

looking at in today's newspapers. And I'm Leanne Geron's plus the bonds that bind us Barclay's looks at boosting fixed income trader bonuses by as much as fifteen That's all straight ahead on Bloomberg Daybreak Europe on DAB Digital Radio, London Bloomberg eleven three oh New York Bloomberg, Washington, d C Bloomberg one oh six one, Boston Bloomberg nine sixties, San Francisco cyrus XM Channel one nineteen and around the world Don Bloomberg Radio dot Com and var the Bloomberg

Business Set. Good morning. I'm Stephen Carroll and I'm Caroline Hick. Here. All the stories that we're following today fed chief to your own. Powell says at least a couple more rate rises will be needed to get inflation under control. His comments come after the Central Bank raised rates by twenty five basis points. Speaking after the announcement, Pal sought to

remind markets that high inflation is still a problem. I would say that our focus is not on short term moves, but on sustained changes the broader financial conditions, and it is our judgment that we're not yet in a sufficiently restrictive policy stance. Despite Powell's caution, markets took his message to be more dovish, with stocks and treasuries both surging. The rate decision came after US job vacancies unexpectedly jumped

at the end of last year. The number of available positions climbed to a five month high of just over eleven million in December. Let's turn to some of the bank earnings we have out this morning, starting with Deutsche Bank fourth quarter fixed income sales and trade sales and trading revenue coming in as a miss one and a half billion euros for the fourth quarter. The estimate had been for one point six billion euros pre tanks profit also coming in below estimates seven hundred and seventy five

million euros. The estimate had been for one point to five billion. Net revenue figures the fourth quarter also a miss six point three two billion euros. The estimate had been for six and a half billion euros. So after Deutsche Bank, let's look at Santander, which is the reported net income for the fourth quarter of two point to nine billion euros. That was a beat on the average analyst estimates. Santander targeting double digit revenue growth in twenty

twenty three and interestingly non performing loans. The ratio of that in the fourth quarter was three point zero eight percent, so actually lower than the estimate for Santander. Noordia, however, was a beat for their net interest income for the fourth quarter, up thirty one percent from a year earlier to one point six four billion euros. That's driven by rising loan aolumes, better deposit margins at the largest lander

in the Nordic region and a couple of others. I and G reporting a pre tax profit for the fourth quarter also that beat average analysts estimates, and then in terms of the money manages w dw S full year net outflows come in actually above estimates nineteen point nine billion euros, so that in terms of the earnings this morning, turning to other news, more than a hundred billion dollars

has now been wiped off gout mcdonni's beleaguered empire. The deepening stock ride comes as some of the conglomerates dollar bonds plunged to distress levels. Speaking in a pre recorded video address to investors, Danny gave a bullish assessment of the group's financial position. The fundamentals of our company are very strong. Our balance it is healthy and assets robust. Our IMMEDIATEA levels and gas rows have been very strong. Was the markets tabulas we will review over capital market streity.

Mcdanie's comments come after the Indian time icon was forced to pull a two point four billion dollar share sale by his flagship company, even though it was fully subscribed. The value of A Danny Enterprises has fallen by so much that investors and the offering would have been sitting on immediate glasses of more than thirty Now. Meta shares swored after the bell in the US as fourth quarter

revenue beat expectations. The social media Jiant also announced that it's boosting its share buy back program by forty billion dollars. CEO Mark Zuckerberg believes the company is entering a phase change focused on efficiency. I just think we're in we've entered somewhat of a phase change for the company where we just grew so quickly for like the first eighteen years of the company's growth, and it's it's very hard to really crank on efficiency while you're growing that quickly.

So that was Zuckerberg. He's focused on efficiency. Comes after Meta announced that it would be cutting eleven thousand jobs in November. Barclays is weighing an increase in the bonus pool for its fixed income trading division, the store even Bloomberg's Charlie Palace. The unit is expected to produce record revenue after twenty two's wild market swings. Sources say the British Bank is considering boosting the overall incentive compensation for

fixed income traders by as much as fifteen percent. Sources say equities trading, which suffered from a decline in derivatives activity last year, might see its overall compensation pot trop as much as ten percent. According to the sources, like other Wall Street firms. Barclay's is considering cutting bonus pools for their investment bankers by as much as fort amid a deal making slump in New York. Charlie Palett Bloomberg Daybreak Europe. Okay, those are a few of our top

stories this morning. But on a very busy day for central bank decisions, there's also going to be a big focus about trading, of course, on the big lenders. I mean, we just went through rattle through frankly a lot of the earnings reports. Just let's focus in there on Deutsche Bank. So the whole idea was that the fixed income sales and trading revenue would be the thing that lifted Deutsche Bank this quarter. But it is actually a miss um.

Even though the outlook is quite interesting from Deutsche Bank that their credit loss provisions are at the low end for the year ahead, but it's that fixed income issue that I think is going to be quite interesting and also cost control at Deutsche Bank. Yeah, and that has been one of the issues that we haven't watching out

for with Deutsche Bank. I mean, there is a point of contrast here with the other set of bank results that we've had because We've had a series of beats from a lot of the big lenders over the past few days. So so Deutsche is standing out with a miss on both pre tax provits and net revenues as well. When we look at the outlook then for the year too, they're seeing three revenue nine billion euros. They had previously

seen over twenty eight billion euros. So that is a slight improvement on the outlook from Deutsche Bank as well. And we're of course getting more details of this as an mergers on the on the latest from Deutsche Bank. Yeah. Absolutely so. In terms of the newspapers, BP scaling back is renewables push, women running UK water and job coaches in GP surgeries. Now the paper review on blue birdday Break Europe. The news you need to know from today's papers.

Bloom Berks Leon Garons joins us now with the details of those stories. Lean, let's start with the Wall Street Journal. It has the headline VP ceo plays down renewables push as returns BLA. Yes, indeed, Stephen, good morning to you.

So Bernard Looney, the CEO of VP, is said to be rolling back elements of the oil giants high profile push into renewable energy, and according to the Wall Street Journal, he is disappointed with the returns from some of the renewable investments that have been made by BP, and it says Looney plans to place less emphasis on ec G goals going further, and what he's trying to do is clarify that these targets aren't distracting from the ability of

the company to actually make a profit. And according to the paper, Looney believes BP needs to do more to convince their shareholders of its strategy to maximize profits in areas where the company does have a competitive advantage, and this is including its legacy oil and gas operations that we know them so well for And a spokesman for the CEO declined to comment to the Wall Street Journal.

And BP does report its earnings next week, and they have been pretty good the last earnings that we've seen from BP, and this is obviously due to the rising energy prices, but once again, really interesting, seems to be slightly moving away from e c G and renewable energy to focus on profits. That's a big debate, isn't it in the energy sphere. But before we get the BP results this morning, we get the Shell fourth quarter of results out actually at seven am, so that will also

be interesting. The expectations to see profits dip at Shell, but no interesting on BP and versus renewables. The headline in the Times, well, this is kind of a little bit related. Seven Trent appoints all women top leadership team. Tell me about this utility? Yes, indeed, So this is the water company Caroline, which is based up in Coventry

and it's now making boardroom history. It will become the first company in the foot see one hundred to appoint in all women leadership team with a female chief executive chairwoman and also chief of Financial officer. So all of this comes as Helen Miles as set to become the CFO in July, along with the CEO of Live Garfield and the chairwoman Christine Hodginson and a majority of boards and foot see one hundred companies, Caroline as still waited

in favor of men. Of course, the number of women in senior roles has actually been growing and we have discussed this on the show a lot, and the water industry has actually been the best sector for female executives to rise to the top. And we know the CEO of Thames Water, Southwest Water and soon Northwest Water. They

all going to be women. However, Denise Wilson, she's the chief executive of the foot See Woman Leaders Group, says, even though we're making massive strides in the right direction, there is still a long way to go and we must bear that in mind. But this seems to be boardroom history, Caroline for all the ladies. I don't know, I would quite like the idea of walking working in a not that I don't like Stephen, but yeah, absolutely, Look,

I'll just chirping. There are only seven female CEOs in the whole foot See one hundred and actually the progress in terms of getting more women into the c suite has really kind of been quite stagnant over the past five years, but on a lot of metrics. But leangoes, thank you. That's a very interesting story. At one more from Lean the Telegraph job coaches as GP surgeries to push unemployed over fifties back to work. What's that about. I'm going to try to tell you what it's all about.

This as part of the government's plan to plug gaps in the labor workforce. We do know it's super tied and also reduce economic inactivity among the over fifties here in the UK. Now, the Telegraph says, is the ideas using GP surgeries to get these coaches in to help people in this age group and give them advice on finding work and really getting back into the working world. And doctors would also be able to refer patients who want to help find work and also advice you know

where to go. Sometimes that first leap isn't it is knowing where to go and how to go about it. The paper says ministers are actively looking at policy as Work and Pension Secretary Miles Stride is leading a review into how to entice unemployed fifty to sixty year old back into the workforce. And this is really as the UK is the only major developed country to have suffered a sustained rise in economic inactivity in this age group

since the start of the pandemic. And I did remember seeing a headline recently saying get off the golf course and get into work. I'm not sure everyone's going to want to agree with that, and there have been trials of this idea. A government back to pilot in South Yorkshire where GP referred patients for work support had a fifty percent success rate out of five thousand people, which suggests that maybe people are ready to go back into the workforce, but they just need that little leg up

and these job coaches are basically designed to do that. Okay, Lean and thank you very much that review the newspapers. Now, a couple more interest rate hikes are on the way, but Jerome Powell says that the disinflation process has started as markets price in rate cuts of fifty basis points by the end of the year from the FED. Attention today is shifting to the ECB and the Bank of England who make their decisions. So let's have a think

about this. Bring in our chief rates correspondent Garfield Reynolds to digest during Power first the Garfield Good Morning Pal says that there's more work to do, but the markets did not seem to hear that. What should we take

away from the FED decision yesterday? Markets teams who have decided that the more work that needs to be done is preparation for rate cuts, which j Power did his best to rule out the difficulty that the FED was always going to face, though once it slowed its pace of hikes and signal that it was close to the end of its hiking cycle, which he definitely signaled is that then markets would rush to price that the next part of the cycle when the FED would turn around

and loosen policy. And in fact, there are a couple of things that Chappou said which encouraged that. He talked a lot about disinflation and the idea that he could see some disinflationary impulses coming through, so that was a red rag to the bond and stockballs as it were.

He also he did be emphasized he has been keen to emphasize this all along, but still he did emphasize his expectation they can manage a soft landing, and a soft landing is seen as meaning that they do not go so far with tightening that they crashed the economy. So his insistence on that was taken by markets as being Okay, they're going to go one or two more

times after this, maybe one, maybe none. And you know, the most immediate and interesting response was the ways swamp markets priced for two rate cuts in the second half of this year, which is not at all something that how you'll put on the table in his comments, but the markets look through that. This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London

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