Morning, and we start with jobs cuts at Goldman Sachs. Many employees will learn their fates today as the Wall Street bank begins cutting more than 3,000 positions.
The redundancies are part of the biggest cost-cutting programme at the bank since the financial crisis and will also see investment banker bonuses slashed by at least 40 per cent.
Ericka Leslie, the bank’s chief administrative officer, has emerged as a central figure in the spending review under the direction of Goldman president John Waldron, according to multiple people briefed on the matter.
One of the more sensitive areas Leslie is probing is Goldman’s spending on two Gulfstream jets, the people said. The lender bought the aircraft in 2019 under the direction of chief executive David Solomon, reversing a longstanding policy to rent private planes from NetJets.
Solomon is under pressure to reduce costs after net profit slid 44 per cent in the first nine months of 2022. Goldman, which reports annual results next week, is struggling to meet a crucial profitability target set by Solomon in 2020 and raised last year.
Earnings season preview: America’s biggest banks are set to report another quarter of bumper profits after profiting from the Federal Reserve’s series of interest rate rises. But the outlook is less certain.
Five more stories in the news
1. FTX boss invested in fund that backed his exchange Sam Bankman-Fried invested $20mn in Paradigm, a venture capital fund that also took a stake in his FTX cryptocurrency exchange group. The arrangement, which highlights the close links between the fallen billionaire and some of his backers, is not inherently wrong but was labelled “weird” by one law professor.
FTX bankruptcy proceedings: A bipartisan group of US senators said Sullivan & Cromwell should not be entrusted to scrutinise FTX because of the law firm’s past work for the cryptocurrency exchange.
2. North American leaders set aside tensions to focus on chips and migration Leaders from the US, Mexico and Canada sought to set aside simmering tensions over drugs, trade and energy to focus on boosting investment in producing semiconductors and quelling a migration crisis that has caused political headaches for Joe Biden. They agreed to organise the first trilateral semiconductor forum and work on installing electric vehicle chargers along international borders.
3. Bernard Arnault promotes daughter in LVMH reshuffle LVMH chief executive Bernard Arnault has promoted his daughter Delphine to run fashion brand Dior as part of a reshuffle at the world’s largest luxury group. Pietro Beccari, who has run Dior since 2018, was named the new chief executive of LVMH’s flagship brand Louis Vuitton.
4. Ukrainian troops to travel to US for Patriot missile training The Pentagon will begin teaching Ukrainian troops to use Patriot missile systems in the US from next week. It will mark one of the few occasions that Kyiv’s forces have been trained on American soil since Russia’s full-scale invasion began last year.
5. Australia’s Cardinal George Pell dies at 81 The former head of the Vatican’s finances, who was jailed for child sexual abuse before being acquitted on appeal, has died at the age of 81 in Rome. Pell was Australia’s most senior figure in the Catholic Church and one of Pope Francis’s closest advisers.
The day ahead
Markets outlook European stocks edged higher but Wall Street futures were lower, as investors looked ahead to the release of December’s US inflation data later this week. The blue-chip S&P 500 and tech-heavy Nasdaq both closed higher yesterday, helped by rises for healthcare and cyclical stocks.
Economic data Brazil‘s retail sales are expected to have fallen 0.3 per cent in November, compared with a 0.4 per cent rise in October, while Mexico‘s national statistics agency is expected to report industrial output probably slipped 0.1 per cent in November, compared with a 0.4 per cent gain in October.
Sunak to sign defence pact with Kishida The UK prime minister hosts his Japanese counterpart in London. They are expected to sign an agreement that will allow them to deploy forces in each other’s countries. Kishida is travelling to G7 capitals for talks with leaders ahead of a planned summit in Hiroshima in May.
What else we’re reading
How Bolsonaro supporters stormed Brazil’s Congress Brazil’s former president Jair Bolsonaro said yesterday he was preparing to return home from the US in the next few weeks after coming under fire for the violence unleashed by thousands of his supporters on Sunday. The FT has created a timeline of how the rioters planned and executed their failed insurrection.
The threat of a lost decade in development The shocks of the past three years have hit all countries, but they have hit emerging and developing countries particularly hard. As a result the convergence of average incomes between rich and poor nations has stalled. Why does this matter? It is creating a debt crisis on a scale not seen since the 1980s in Latin America, argues Martin Wolf.
Virgin Orbit scrambles to explain failed satellite launch The US-based company has appointed a team to investigate Monday’s failed satellite launch from England’s south western county of Cornwall. Virgin Orbit said yesterday it was still “too early” to set a date for another attempt after the UK’s hopes of making history as the first country to put a commercial satellite into space from western Europe were dashed.
Fed will not become a ‘climate policymaker’, says Jay Powell The chair of the Federal Reserve yesterday mounted a full-throated defence of the US central bank’s independence from political influence. He said the Fed must stick to its “statutory goals” and “resist the temptation to broaden our scope”. The central bank has been criticised by some Republican lawmakers for pledging to consider climate-related financial risks.
Germany leads on regulating Big Tech While EU regulators work out how to implement their landmark Digital Markets Act, Berlin is already opening high-profile probes into the world’s largest tech companies. German regulators say their new antitrust law is years ahead of the EU’s in clamping down on so-called gatekeepers such as Meta, Google and Amazon, and could capture more illegal conduct.
Church of England sets aside £100mn to address ‘shameful past’ of slave trade A report by forensic accountants and historians published yesterday found the church’s financial arm had received funds linked to enslavement potentially worth more than £1bn in today’s money.
Take a break from the news
FT Globetrotter got a first look at the new seafood restaurant Hav & Mar from Marcus Samuelsson. The Swedish-Ethiopian restaurateur aims to set an example in the industry by hiring Bipoc (black, indigenous and people of colour) staff and sourcing ingredients from Bipoc producers, while revolutionising kitchen culture and focusing on sustainability.
Source: Economy - ft.com
