Aurelia Butler

Bank analysts are sharply divided over just how bad Goldman Sachs’ second-quarter earnings will be, offering a much wider range of estimates than is typical for the Wall Street company.There is a consensus that it will not be one of Goldman’s best quarters, but some are predicting it could be one of the bank’s worst when it reports later today.Earnings estimates range from Goldman making 33 cents per share and barely eking out a profit, to almost $5 a share and netting more than $1.5bn.While it is not uncommon for analysts to disagree, the debate over what Goldman, led by chief executive David Solomon, will report is more divided than usual.Like its peers, Goldman’s earnings are suffering from a sharp drop in investment banking fees and a slowdown in stock and bond trading. But the bank’s profits will also likely take a hit from the recent acquisition of home improvement lending business GreenSky and losses from its consumer and commercial real estate loan portfolios. Read more on what to expect from Goldman’s earnings. Read more on banks: Corporate and institutional depositors are demanding higher rates on their deposits and are beginning to shift their funds in search of a higher yield, yesterday’s results show.Here’s what else I’m keeping tabs on today: Results: Tesla, Netflix, IBM, United Airlines and Halliburton also report earnings today.Economic data: New US residential construction starts from the commerce department. US Congress: Israeli president Isaac Herzog will address a joint meeting of the House of Representatives and Senate.Five more top stories1. Donald Trump has said he is the target of a new criminal probe into efforts to overturn the results of the 2020 US presidential election, raising the possibility he could face fresh federal charges in the coming days. The former president yesterday said he had received a letter from the Department of Justice informing him of the investigation. Read the full story.More on Trump’s legal troubles: The former president has at least six cases against him. Here’s a breakdown of each.2. Exclusive: Vladimir Putin ordered the seizure of Danone and Carlsberg’s Russian operations after businessmen close to the Kremlin expressed an interest in the assets, according to people close to the decision. Read the full story.More on the Ukraine war: Saudi Arabia and Turkey are seeking to broker a deal to repatriate thousands of Ukrainian children taken to Russia and held in children’s homes or adopted by Russian families.3. A US economist chosen for one of the top posts in the European Commission’s competition division has withdrawn after the appointment provoked a backlash, led by France. Read more on the decision by Fiona Scott Morton, a former Obama administration official, not to take a job in Margrethe Vestager’s department. 4. Microsoft is to charge $30 a month for generative artificial intelligence features in its software used by hundreds of millions of office workers. The premium is bigger than expected on a technology that many in the industry hope will bring a powerful boost to revenues. Microsoft chief executive Satya Nadella revealed more details of the charges in an interview with the Financial Times. 5. Big investment banks are turning more bearish on the dollar in the wake of last week’s unexpectedly large drop in US inflation. Morgan Stanley, JPMorgan Chase, Goldman Sachs and HSBC are among the lenders to have either scrapped bullish dollar calls or forecast further declines for the currency as expectations grow of a “soft” economic landing. Read more on the forecasts for the future direction of the dollar.The Big Read

© FT montage: AFP/Getty/Dreamstime

After Switzerland joined the embargo imposed on Moscow following Russia’s full-scale invasion of Ukraine, much of the Russian oil trade in Geneva shifted to the Middle East. According to a Financial Times analysis, companies registered in Dubai bought at least 39mn tonnes of Russian oil worth more than $17bn between January and April — about a third of the country’s exports declared to customs during that period.We’re also reading . . . Fossil fuels: Shell and ExxonMobil cannot lead us out of the climate crisis. Only governments have the power to cut demand for oil and gas, writes Pilita Clark.Training AI: Tech groups including Microsoft and OpenAI are experimenting with computer-made “synthetic data” to train artificial intelligence models.The FT View: Hollywood’s strikers are writing the script for other industries as they argue over how to divide the spoils in the new era of digital delivery. Chart of the day

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Spain is likely to become the latest European country to shift to the right after Sunday’s general election. Polls suggest the hard right Vox party will emerge as the power broker in a coalition led by the conservative People’s party although Alberto Núñez Feijóo, leader of the PP, is fighting to avoid sharing power with the populist party. Read more on Spain’s upcoming election. Take a break from the newsGreta Gerwig’s Barbie film is a seamless blend of infectious, Day-Glo wit that also peers into the chasm between the have-it-all vision of femininity sold to little girls by the doll’s maker Mattel and the grinding, impossible choices that face many adult women, writes Danny Leigh in his 4-star review.

Margot Robbie and Ryan Gosling as Barbie and Ken, leaving Barbie Land for the Real World

Additional contributions by Tee Zhuo and Benjamin Wilhelm More

If you ever need advice about breaking up with your bank, just ask Bruno J. Navarro. He has done it three times.The technology marketer from Maplewood, New Jersey, cut ties for a variety of reasons, such as increased fees and low interest rates on savings. Sometimes the process is straightforward, sometimes it’s trickier – but Navarro has no qualms about packing up his financial accounts and heading to another institution.“I’d say just go ahead and jump in,” says Navarro, 51, who has left banks like Chase, TD and Capital One and currently uses a credit union. “It might be a few minutes of pain to fill out forms, but I’m much happier having found financial institutions with customer-friendly policies and practices.”Navarro isn’t alone in switching banks. In fact, 79% of U.S. consumers say they would change banks if they found one to better meet their needs, according to a 2023 poll by financial site The Motley Fool Ascent.The main problem for breaker-uppers: “Banking relationships are sticky,” says Erika Safran (EPA:SAF), a financial planner in New York City. Especially these days: Maybe you get paid by direct deposit. Maybe your monthly bills are set up to come out of those accounts automatically. Your checkbooks, your personal loans, your credit cards – all could be tied to one institution, and all interlinked.In that way, breaking up with your bank can almost feel like the end of a personal relationship: the history, the entanglements, the desire for something better. As the old Neil Sedaka song goes: Breaking up is hard to do.But it can be done – whether because of bad customer service, a lack of brick-and-mortar branches, or annoying fees. A few ideas about how to manage a bank breakup:ONLY MOVE SOME ACCOUNTSLet’s take a very common scenario these days: Your bank is offering almost zilch on savings, while other online banks are offering around 5%.There is no law that says you have to leave your bank to take advantage of that difference. Consider having accounts at two institutions. “It doesn’t have to be painful,” says Matt Stephens, a financial adviser in Wilmington, North Carolina.“Most of the hassle is from switching checking accounts, but most of the benefit comes from switching savings accounts,” Stephens says. “One strategy is to leave your checking account where it is, but move your savings account to a bank with a higher interest rate.”GO THROUGH ALL YOUR AUTOMATIC DEBITS AND CREDITSMuch of our financial lives are automated these days, which is great – paychecks, utility payments, streaming subscriptions and so on.But that makes switching over that much more complicated. If bills go unpaid because they are linked to defunct accounts, that could disrupt services and damage your credit record.Advice from Jennifer Bush, a financial planner in San Jose, California: Go through your last few months of bank statements to identify ongoing charges, and contact every one of those companies to switch them over to your new accounts.As you do so, keep your old account open for a while, just in case there is anything you have missed.“Once you have confirmed that all direct deposits and automatic payments have been switched, and no new transactions are going to the old bank, then you can close the old account,” Bush says.COMPARE AND CONTRASTOften people feel compelled to take action in the heat of the moment – perhaps over anger at an overdraft fee, for example.But the reality is that another institution may have those same fees. You would be wise to do your due diligence beforehand, and study everything from minimum account balance requirements to ATM charges. To work through those issues and weigh your best options, check out the FDIC’s “Banking Checklist” here.As a result of comparison shopping, you may even decide to stay put. But information is your friend and finding something better could quite literally mean thousands of dollars in your pocket.Says Navarro, who is happy, for now, with his current institution: “It doesn’t hurt to shop around and look at interest rates, even if only once a year, or to check out your local credit union to see what you’ve been missing.” More

WASHINGTON (Reuters) – The White House on Wednesday expanded its war on junk fees to the rental housing market, announced a crackdown on price-fixing in food and agricultural markets, and unveiled draft merger guidelines as part of an ongoing push to aid U.S. consumers.President Joe Biden, who has made attacks on corporate greed and power a centerpiece of his administration, will discuss the latest actions with Cabinet members at the fifth meeting of his Competition Council on Wednesday.The White House explained the new measures in a series of factsheets as it marked the second anniversary of the Biden executive order that created the council and launched a government-wide attack on anti-competitive practices.It said four decades of “misguided economic philosophy” had resulted in rising concentration in three-fourths of U.S. industries, costing the median U.S. household up to $5,000 a year in higher prices and lower wages.Hannah Garden Monheit, the newly named director of Competition Council Policy at the National Economic Council, told Reuters the administration would “use all the tools that we have” to curb anti-competitive practices.She said the new actions would build on successes in meatpacking, ocean shipping and consumer junk fees, while driving down inflation.While the junk fee crackdown has found strong bipartisan and public support, industry has chafed at the increased oversight, accusing the Biden administration of “regulatory overreach.”Morgan Harper, a former Consumer Financial Protection Bureau official, said Biden’s drive for more competition was focused on creating more opportunities for small firms and entrepreneurs.”We don’t really have a competitive marketplace unless we have strong government enforcement,” Harper, now at the American Economic Liberties Project, said. “Concentration issues all over the economy are hurting workers, they’re hurting small businesses, and they’re hurting consumers.”RENTAL HOUSING FEESThe White House said three of the largest rental housing platforms – Zillow, Apartments.com and AffordableHousing.com -had agreed to disclose total, upfront data on rental costs. These include application fees that can run to $100 or more per application, and “convenience fees” sometimes charged for paying rent online or disposing of trash.A senior official said the move would not lower fees, per se, but increased transparency should cut them down by giving the tens of millions of renters who use them a chance to comparison-shop.Biden has repeatedly called for federal agencies, Congress and private companies to address surprise fees that can jack up consumers’ cost by 20%. Three of the biggest airlines have already agreed to scrap fees for children to sit with parents.Other actions announced Wednesday included draft merger guidelines that pave the way for tougher scrutiny of planned mergers by Big Tech companies like Amazon.com (NASDAQ:AMZN) and Alphabet’s Google (NASDAQ:GOOGL).One senior official said the goal was to eliminate “various blind spots” that had contributed to consolidation, noting that the Federal Trade Commission had received over 5,000 comments as it was shaping the new guidelines.The White House also announced moves by the Department of Agriculture, joined by 31 states and Washington, D.C., to target price fixing and other anticompetitive behavior in highly consolidated food and agriculture sectors. More

NEW YORK (Reuters) – Investors in El Salvador international bonds are relishing 60% returns this year alone as debt issued by the Central American country recovers from calls of doom and default, with some betting the rally is not quite over yet.Rising tensions between Washington and President Nayib Bukele’s government, dwindling prospects of a financing deal with the International Monetary Fund (IMF) and the fallout from bitcoin becoming legal tender against a wider difficult macro backdrop had seen El Salvador bonds drop to a quarter of face value last July.Fast forward 12 months and two surprise debt buybacks have left the country’s payment schedule very light until 2027, while the appointment of a former IMF official as adviser to the finance ministry has sent the right signals to markets, investors say. A bond maturing in 2025 is trading at 89 cents, up from about 27 cents a year ago.”In the summer of 2022, El Salvador bond prices were divorced from fundamentals,” said Aaron Stern, managing partner and chief investment officer at Converium Capital in Toronto, who has been holding the country’s bonds since last year.”The market was concerned about the administration’s willingness to pay,” he said, but even now El Salvador offers attractive value when compared to a number of better priced emerging market sovereigns.The appointment of ex-IMF official Alejandro Werner resuscitated hopes that an IMF deal might eventually come good – and in the meantime, the country could see more structured policy making.”Bukele has one of the highest approval rates and he has managed that successfully, and there’s also an understanding that you have to make sure that the country continues to have access to the market… it’s a dollarized economy,” said Shamaila Khan, head of fixed income for Emerging Markets and Asia Pacific, UBS Asset Management.El Salvador’s debt-to-output ratio stood at 77% in December, the lowest since 2019, and is forecast to drop another percentage point this year before rising to 78% in 2024, according to Refinitiv data. Total public debt was $19.7 billion in May from $25.4 billion at the close of 2022.Salvadoran dollar bonds currently yield between 14% and 18%, according to Refinitiv data. These were the best performing among sovereign bonds in the first half of the year, with total returns near 60%. And even after such a run, some say it’s not yet time to cash out.”In a year where carry is the main driver of total returns, investors are going to be reticent to take profits too early,” said BNP Paribas (OTC:BNPQY)’ Nathalie Marshik, a managing director for Latin America fixed income.”El Salvador is somewhat uniquely positioned as one of the highest yielding ‘performing’ distressed credits,” she said, adding that it would take a “significant” fiscal deterioration or a change in the political tone towards the market for bonds to stage another selloff.JPMorgan (NYSE:JPM) moved its recommendation on the country’s hard-currency debt to “overweight” from “market weight”, saying “the external and fiscal picture of the country seem constructive in the short term”.Some wonder how much more road the story has to run, with February presidential elections raising concern about fiscal prudence as Bukele seeks a reelection that is now allowed after a ruling from a friendly court.”Ideally some policy adjustment would be announced early post-elections to appease the market as the current muddle through policy is going to be difficult to repeat in 2024,” Marshik said. More

UK inflation fell to a 15-month low of 7.9 per cent in June, a bigger drop than anticipated that made it more likely that the Bank of England will raise interest rates by only a quarter point next month. Sterling fell and property stocks rallied on the news.Annual inflation was down from 8.7 per cent in May, the Office for National Statistics said on Wednesday. The figure was lower than the 8.2 per cent forecast by economists polled by Reuters, ending a four-month period of price growth exceeding forecasts.It was also in line with the 7.9 per cent forecast by the BoE in May and the lowest since March 2022.Sterling fell to its lowest in a week, trading 0.6 per cent down against the dollar at $1.2952.  Paul Dales, economist at Capital Economics, said that, while the fall in inflation was unlikely to deter the BoE from increasing interest rates from the current 5 per cent at its next meeting, “it may tilt the balance towards a 25 basis points hike rather than 50 basis points”.Markets now give a 60 per cent probability to a quarter point rise to 5.25 per cent at the August 3 meeting. Before Wednesday’s news they had been pricing in a better than even chance that the bank would increase rates by a half percentage point to bring inflation back to its 2 per cent target.Traders now expect BoE benchmark interest rates to peak just below 6 per cent early next year, compared with just above 6 per cent that was expected before the inflation figures.Lower inflation is likely to ease the pressure on mortgage rates after stronger than expected price and wage growth over the previous months had pushed up interest rate expectations and therefore payments for borrowers. Shares in UK property groups and housebuilders surged as investors dialled back their expectations for where interest rates might peak.Persimmon, Barratt and Taylor Wimpey rose 5.7 per cent, 4.9 per cent and 4.8 per cent, respectively, in early trading, helping London’s FTSE 100 rise by 1 per cent.Landsec, one of the UK’s largest landlords, and real estate group Segro were also among the FTSE’s biggest winners early on Wednesday.In one of the most closely watched metrics of Wednesday’s figures, core inflation, which strips out volatile food, energy, alcohol and tobacco prices, declined to 6.9 per cent in June from a 31-year high of 7.1 per cent in the previous month. Analysts had expected core inflation to be unchanged.Services inflation eased to 7.2 per cent in June from 7.4 per cent in May.

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Both core and services inflation are closely watched by BoE policymakers to monitor underlying and domestic price pressures and decide on interest rates.The data will be welcome news for UK prime minister Rishi Sunak, who has pledged to halve inflation this year before a probable 2024 election. Chancellor Jeremy Hunt said: “Inflation is falling and stands at its lowest level since last March, but we aren’t complacent and know that high prices are still a huge worry for families and businesses.”Rachel Reeves, shadow chancellor, said: “Inflation has been persistently high and remains higher than our international peers. This is becoming a hallmark of Tory economic failure.”

Grant Fitzner, ONS chief economist, said that in June “inflation slowed substantially to its lowest annual rate since March 2022, driven by price drops for motor fuels”.Led by motor fuel, the price of transport fell by an annual rate of 1.8 per cent last month. Although it remained at historically high levels, food inflation also eased to 17.3 per cent in June, from 18.3 per cent in the previous month. ONS data also showed that the annual growth of producer price inputs, such as parts and materials, turned negative in June for the first time since November 2020. The rate has slowed for the 12th consecutive month from its record annual high of 24.4 per cent in June 2022 to minus 2.7 per cent last month.Despite the larger than expected decline, UK price growth remained higher than in other G7 countries, with economists blaming a combination of surging energy costs and labour shortages.In June, US inflation slowed to a 27-month low of 3 per cent, while price growth dropped to a 17-month low of 5.5 per cent in the eurozone. Dales said: “The UK will probably still have higher rates of inflation than elsewhere for a while yet, but at least the UK is now following the global trend.” Additional reporting by Mary McDougall More