1. JPMorgan and Morgan Stanley kicked off second-quarter banking results on Thursday. Weak mortgage numbers and lack of activity in capital markets will come under scrutiny as rising rates and market volatility tame appetite for deals.
Investment banks have boosted their profits in recent years thanks to record capital markets activity and mergers and acquisitions, both of which have thrived in a low interest rate environment.
Corporate profits, meanwhile, are set to weaken. The comfort of startups the bubble also burst and defaults are expected to rise next year, meaning companies are reluctant to take on debt, according to data from Fitch Ratings. Global syndicated loan volumes totaled $2.14 trillion for the first half of 2022, down 21% from the same period last year, according to Refinitiv data.
Capital of the Renaissance IPO Index is down 43% since the start of the year, and Axios reportedthat capital markets bankers who are tasked with arranging IPOs may have to wait until next year to launch new deals.
A banker told Insider he expects to see cuts in capital markets after Labor Day.
Despite the slump in deals, bankers focused on advisory services are confident that deals will close if conditions normalize. And then there is restructure people who have everything to gain when struggling companies need to clean up their capital structures and balance sheets.
Citi and Wells Fargo report Friday, while Bank of America and Goldman Sachs complete quarterly results Monday, July 18.
2. John Sandberg, a Douglas Elliman real estate agent, bought a penthouse in Miami with funds he withdrew from the stock market. Here’s why he thinks the Citadel move from Chicago will boost The Miami real estate market.
4. Morgan Stanley appointed new global co-heads of investment banking, Reuters reported. The bank’s current heads of investment banking, Mark Eichorn and Susie Huang, have been named executive presidents of the division, Bloomberg first reported.
5. Bill Ackman returns to investors the $4 billion he raised for his record-breaking SPAC. In a letter to shareholders of Pershing Square Tontine Holdings, Ackman said the rapid economic recovery from the COVID pandemic has disrupted attempts to find a suitable target company to go public through a merger.
6. A Facebook Marketplace scam is using fake Zelle emails to trick users into sending money. One seller who fell for it said $300 was missing and warned others to take a good look at the details. When customers say their money was stolen on Zelle, banks often refuse to pay, according to this report from the New York Times.
7. Remote, backed by SoftBank, cuts 10% of its staff. The onboarding startup was valued at nearly $3 billion in its last funding round. He cited economic uncertainty and a focus on more sustainable growth as reasons for the dismissal of nearly 100 workers.
8. The founders of Three Arrows Capital do not cooperate with the liquidators. The bankrupt crypto hedge fund defaulted on a $670 million loan and its founders whereabouts are unknown.
9. Claira, a startup using AI to analyze financial contracts, just secured funding from Citi’s strategic investment arm. Here is the 14-page pitch deck that sold the American lender on Claira.
10. Accountants and consultants working in the “Big Four” companies earn six-figure salaries and can also pocket handsome bonuses. Here is how many people from Deloitte, PwC, KPMG and EY are.
Partner group acquired a majority stake in energy supplier as a service Budderfly. The private equity firm has also committed more than $500 million in growth capital as part of its investment. Canada Pension Plan and Investment Board invested $334 million at Latin American discount food retailer D1. The Canadian firm will hold a 19.3% stake in D1.