Author: Consultant

Canada’s West Fraser Timber target of joint bid by private equity firm CVC, panel maker Kronospan: report

Private equity firm CVC Capital and wood panel manufacturer Kronospan have submitted a joint expression of interest to acquire Canadian lumber company West Fraser Timber Co, people familiar with the matter said on Tuesday.

Shares in West Fraser, which has a market capitalization of $10.6 billion, rose more than 18 per cent in morning trading in Toronto on the news.

CVC and Kronospan have informed West Fraser’s management they would like to proceed with deal negotiations, the sources said. The acquisition terms they proposed could not be learned.

There is no certainty that the parties would agree to any deal, the sources said, asking not to be identified because the matter was confidential.

CVC declined to comment, while West Fraser and Kronospan did not immediately respond to requests for comment.

The acquisition interest in West Fraser follows a two-year rally in its shares, as more people isolating and turning to home improvement during the COVID-19 pandemic led to a surge in demand for products such as lumber and plywood.

The housing market was boosted more broadly by people seeking more space as they worked from home.

But the company also faces headwinds. It said in its most recent earnings call in April that it had been struggling to fulfill orders because of transport and logistics problems in Western Canada that have persisted in the pandemic.

Privately held Kronospan, run by Austrian businessman Peter Kaindl, is a European maker of wood panels such as particle board and laminate flooring. CVC has 125 billion euros ($128 billion) in assets under management, according to its website.

Before the Bell: July 19

Equities

Wall Street futures were higher early Tuesday as traders await late-day results from Netflix Inc. Major European markets steadied as the session progressed. TSX futures were modestly positive.

In the early premarket period, futures linked to the Dow, S&P 500 and Nasdaq were all above water. A day earlier, all three closed lower despite strength early in the session. The S&P/TSX Composite Index bucked the trend, finishing Monday’s session up 1.09 per cent.

Tuesday will see continued results from big U.S. companies, notably earnings from Netflix after the close of trading. Investors will be carefully watching the streaming giant’s subscriber numbers after a disappointing showing in the previous quarter.

“The implosion in Netflix share price has been something to behold on the last few months,” Michael Hewson, chief market analyst with CMC Markets U.K., said.

“Since the heady heights of US$700 in November last year, we’ve seen a collapse in confidence that has returned the shares to levels last seen in 2017.”

He said subscriber growth, which had been the main driver for gains in 2020, came to a halt in the first quarter of this year, with investors questioning whether Netflix had peaked.

“The main fear for Netflix shareholders over the past few years was how would the business cope once its deeper pocketed rivals started to cotton on to the streaming model that Netflix had helped shape over the last ten years,” he said. “It appears we are starting to see the answer to that question, with the emergence of Disney+ as its main new rival, while Amazon is also spending big on new content, with a new Lord of the Rings series called Ring of Power.”

In the first quarter, Netflix surprised markets by reporting its first quarterly decline in subscribers in a decade. The company has said it expects to lose another 2 million subscribers in the second quarter, although it also forecast revenue growth of about 10 per cent year-over-year, Mr. Hewson said in a note.

“This appears optimistic and the stronger US dollar certainly isn’t helping. Netflix said its currently producing films and TV in more than 50 countries, with three out of its six most popular TV seasons using non-English language titles, and yet refuses to hedge its FX exposure,” he said.

In this country, The Globe’s Emma Graney and Marieke Walsh report the federal government says it plans to implement its oil and gas emissions cap through a new carbon pricing system, leaving the sector worried it will be charged more for greenhouse gas emissions than other heavy industries. And Canada’s largest oil-producing province says it won’t accept any federal plan that would harm its ability to produce fossil fuels.

Reuters, citing unnamed sources, says private equity firm CVC Capital and wood panel manufacturer Kronospan have submitted a joint expression of interest to acquire Canada’s West Fraser Timber Co. U.S.-listed shares of West Fraser were up nearly 25 per cent in premarket trading.

Overseas, the pan-European STOXX was up 0.03 per cent by midday. Britain’s FTSE 100 gained 0.32 per cent. Germany’s DAX advanced 0.12 per cent while France’s CAC 40 slid 0.08 per cent. Reuters, citing sources, reported Tuesday that European Central Bank policymakers will discuss whether to raise rates by a bigger-than-expected 50 basis points at the bank’s policy meeting this week. The rate decision is due Thursday.

In Asia, Japan’s Nikkei gained 0.65 per cent. Hong Kong’s Hang Seng fell 0.89 per cent.

S&P 500 FUTURES

3,863.25+27.75 (0.72%)

DOW FUTURES

31,224.00+177.00 (0.57%)

TSX 60 FUTURES

1,129.60+5.90 (0.53%)

PAST DAY

0.77%0.57%0.53%

CLOSE, JULY 18

6:40 A.M., JULY 19

SOURCE: BARCHART

Commodities

Crude prices fell in early going after the previous session’s strong showing fuelled by continued supply concerns.

The day range on Brent is US$105.16 to US$106.98. The range on West Texas Intermediate is US$101.71 to US$103.40. Both benchmarks jumped by roughly 5 per cent on Monday.

“Oil prices may have peaked, but they certainly don’t look like they’re going materially lower from here unless we get a huge surprise from OPEC+,” OANDA senior analyst Jeffrey Halley said.

“Stubbornly firm economic data from the U.S. and improving data from China are other supportive factors. Risks remained skewed to the upside if Russian gas does not start flowing back to Europe at the end of this week.”

Later in the session, traders will get the first of two weekly U.S. inventory reports with fresh figures from the American Petroleum Institute. That report will be followed Wednesday morning with more official U.S. government numbers.

A Reuters poll suggests that analysts are expecting to see a rise in crude and distillate supplies while gasoline stocks are seen declining.

In other commodities, gold steadied on Tuesday, helped by a pullback in the U.S. dollar.

Spot gold traded around US$1,708.35 per ounce early Tuesday morning. U.S. gold futures eased 0.3 per cent to US$1,704.80.

SPOT GOLD

US$1,715.00+2.60 (0.15%)

HIGH GRADE COPPER

US$3.30-0.04 (-1.17%)

WTI

US$97.20-1.46 (-1.47%)

PAST DAY

0.28%-1.40%-2.23%

CLOSE, JULY 18

6:34 A.M., JULY 19

SOURCE: BARCHART

Currencies

The Canadian dollar gained as its U.S. counterpart continued to pullback against a group of world currencies.

The day range on the loonie is 76.98 US cents to 77.31 US cents.

“So-so risk appetite may be restraining the CAD to some extent while crude prices are a little softer,” Shaun Osborne, chief FX strategist with Bank of Nova Scotia, said.

Investors are now awaiting the release on Wednesday of June inflation figures, which are expected to show the annual rate of inflation topped 8 per cent last month.

On world markets, the U.S. dollar index fell 0.8 per cent to 106.64. That was below Monday’s low of 106.88 but also well back from the high of 109.29 last week, a level not seen since September 2002, according to Reuters.

The euro, meanwhile, gained on a Reuters report that ECB policymakers are weighing hiking rates by a surprise half percentage point when they meet on Thursday.

The euro rose as high as US$1.0254, up more than 1 per cent to its best level since early July.

Britain’s pound rose 0.6 per cent to US$1.2017, near Monday’s one-week high of US$1.2032.

CANADIAN DOLLAR/U.S. DOLLAR

US$0.7723+0.0022 (0.2909%)

PAST DAY

PREV. CLOSE2:57 A.M., JULY 19

0:00 A.M., JULY 19

US$0.7708

6:34 A.M., JULY 19

US$0.7723

SOURCE: BARCHART

More company news

BHP says it is working to bring its Jansen potash mine into operation sooner than expected. The company says it is working to bring forward Stage 1 first production at the Saskatchewan mine to 2026. When BHP announced last year that it was going ahead with the project, the company said it wouldn’t come into operation until 2027. However, in an operational review released Tuesday, the company says the project is tracking to plan and it is working to begin production ahead of its initial schedule.

Johnson & Johnson on Tuesday posted a 23.3-per-cent fall in quarterly profit and cut its full-year adjusted profit forecast as a stronger U.S. dollar dragged on its sales outside the United States. The company now expects a full-year adjusted profit of US$10.00 to US$10.10 per share, from its prior forecast of US$10.15 to US$10.35.

Twitter Inc’s showdown with Elon Musk over his US$44-billion takeover faces its first test on Tuesday, when a judge will weigh the company’s bid for a fast-tracked trial which it says it needs to ensure deal financing doesn’t come unraveled. The San Francisco-based company is seeking to resolve months of uncertainty for its business as Musk tries to walk away from the deal over what he says are Twitter’s “spam” accounts that he says are fundamental to its value.

Hasbro Inc reported a 10-per-cent rise in quarterly adjusted earnings, helped by demand for the toy maker’s tabletop game “Magic: The Gathering” and an increase in prices. The Monopoly maker reported adjusted net earnings of US$160.6-million in the second quarter ended June 26, compared with US$145.4-million a year earlier.

Apple Inc plans to slow hiring and spending growth next year in some units to cope with a potential economic downturn, Bloomberg News reported on Monday, citing people with knowledge of the matter. The potential move would see Apple – the world’s most valuable company – join a growing pool of American corporations including Meta Platforms and Tesla Inc in slowing hiring.

IT hardware and services company IBM Corp beat quarterly revenue expectations on Monday but warned that the hit from forex for the year could be about US$3.5-billion due to a strong U.S. dollar. IBM now expects a foreign exchange hit to revenue of about 6 per cent this year, Chief Financial Officer James Kavanaugh told Reuters. It had previously forecast a 3 per cent to 4 per cent hit. The results were released after Monday’s close.

Chinese authorities are preparing to impose a fine of more than US$1-billion on ride-hailing firm Didi Global that could bring an end to a probe into the company’s cybersecurity practices, the Wall Street Journal reported on Tuesday.

Economic news

Euro area consumer price index for June. UK releases employment numbers.

(830 am ET) U.S. housing starts for June.

(830 am ET) U.S. building permits for June.

With Reuters and The Canadian Press

July 19 : Oil prices ease from sharp spike, soft dollar supports

Oil prices ran out of steam on Tuesday after gaining more than $5 a barrel in the previous session with concerns that surging crude will feed into a demand-killing recession slightly outpacing continued worries about tight supply.

Brent crude futures for September settlement fell 1.5% to $104.67 per barrel. The contract rose 5.1% on Monday, the biggest percentage gain since April 12.

WTI crude futures for August delivery dipped 1.71% to $100.84. The contract climbed 5.1% on Monday and the largest percentage gain since May 11.

The August WTI contract expires on Wednesday and the more actively traded September future was at $98.98 a barrel, down 44 cents.

Oil prices have been whipsawed between concerns about supply as Western sanctions on Russian crude and fuel supplies over the Ukraine conflict have disrupted trade flows to refiners and end-users and rising worries that central bank efforts to tame surging inflation may trigger a recession that would cut future fuel demand.

The underlying supply/demand imbalance is as tight as ever,” said Jeffrey Halley, senior market analyst at OANDA, in a note. “Oil prices may have peaked, but they certainly don’t look like they’re going materially lower from here unless we get a huge surprise from OPEC+.”

U.S. President Joe Biden visited top oil exporter Saudi Arabia last week, hoping to strike a deal on an oil production boost to tame fuel prices.

However, officials from Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC), did not give clear assurances an output increase was secured.

Warren Patterson, head of Commodities Strategy at ING, said in a note that the market has had time to digest President Biden’s visit with a conclusion that it is unlikely that OPEC and its allies including Russia, known as OPEC+, will increase output more aggressively than planned in the short term.

Oil prices were backed by a softer U.S. dollar on Tuesday, which stood around a one-week low level, making greenback-dominated oil slightly cheaper for buyers holding other currencies.

“A weaker USD provided support to the market, along with the broader commodities complex,” ING’s Patterson said.

The forecast of oil inventories in the U.S., the world’s biggest oil consumer, was that crude and distillate supplies may have risen last week while gasoline stockpiles likely fell, according to a preliminary Reuters poll.

The froth is off: Canadian houses now selling at $200K discounts

The plunge is merely a correction of a Canadian real estate market that has long operated beyond any reasonable notion of economic fundamentals

The once-red hot Canadian real estate market is beginning to witness a trend that would have been unthinkable just months ago: Homes are starting to sell at a discount.

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In Victoria, a luxury five-bedroom listed at $2.25 million ended up selling at $1.93 million — a drop of $320,000. In the same month, a home on the other coast — in Halifax — sold at $140,000 below its list price of $900,000.

The Toronto suburbs, in particular, are yielding a near-daily stream of homes sold at discounts of more than $100,000.

A detached home in Mississauga, west of Toronto, went on the market in April at $1.6 million. After two months, the sellers let it go for $1.38 million.

A four-bedroom mini-mansion in Brampton, 40 km northwest of Toronto, hit the market at $1.8 million but ultimately sold for $1.5 million, a price reduction of $300,000.  A similar Brampton home spent 35 days on the market at a list price of $1.4 million before sellers accepted an offer that was more than $250,000 lower.

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Many other sellers are rejecting low bids outright.

Another phenomenon to hit Canadian real estate in recent weeks has been a spike in “delistings,” homes that are taken off the market after failing to attract any bids. In some regions of Ontario right now, more homes have been delisted in the past 30 days than have been sold.

If sellers are chronically overestimating the values of their homes, it’s largely because Canadian home sales had spent more than a year being defined by the exact opposite phenomenon. This time in 2021, virtually every real estate market in Canada was seeing homes go to bidding wars that yielded sales up to 20 per cent higher than list prices.

In Ottawa last September, the average list price was $524,000 against an average sale price of $670,000 — indicating that the average home was being bid up by $146,000. As recently as March, Toronto was seeing bids over asking of more than $500,000.

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The return of “sold under ask” pricing to Canadian real estate is one of the most obvious signals of a market that is entering a period of prolonged freefall. In June alone, Canadian home prices fell by 1.9 per cent, which a Royal Bank analysis called the “largest-ever one-month decline.”

“Canadian home prices are dropping faster and faster, especially in Ontario and parts of British Columbia,” it read.

The biggest driver for the decline is the looming end of cheap debt. Last week, as part of its ongoing bid to curb skyrocketing inflation, the Bank of Canada upped its overnight rate to 2.5 per cent. Throughout the COVID-19 pandemic, by contrast, interest rates had sat at a rock-bottom 0.25 per cent.

Thus far, the plunge is merely a correction of a Canadian real estate market that has long operated beyond any reasonable notion of economic fundamentals. In the last 20 years, average Canadian real estate prices have risen 375 per cent nationwide — a surge that has rendered home ownership unaffordable for millions of Canadians.

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Even homes selling “below asking” are still fetching prices up to 100 per cent higher than the values they commanded just a few years ago.

Last week, a five-bedroom outside the city limits of Fredericton, N.B., sold for $720,000 — just a touch under its list price of $725,000. In November 2019, however, that same house sold for just $475,000. Even with the “under ask” sale, that’s a rate of appreciation equivalent to nearly $8,000 per month.

In Toronto last month, the average home price stood at $1.15 million, a decline of $100,000 from the $1.25 million that had reigned just two months prior.

Nevertheless, after a fall and winter in which six-figure overbids had been routine, that “lower” price of $1.15 million is still 5.4 per cent higher than last summer.

Asia-Pacific markets mostly lower after a positive start to the week

• Shares in the Asia-Pacific were mostly lower Tuesday after a positive start to the week, and as investors digested Australia’s central bank’s meeting minutes.
• Major U.S. stock indexes pulled back and closed lower after rallying earlier in the session.
• The Dow Jones Industrial Average dropped 215.65 points or 0.69% to 31,072.61. The S&P 500 shed 0.84% to 3,830.85. The Nasdaq Composite lost 0.81% to 11,360.05.

https://www.cnbc.com/2022/07/19/asia-markets-reserve-bank-of-australia-stocks-currencies-oil.html

Suncor shakeup should have been led by the board, not an activist hedge fund

In boxing terms, U.S. activist Elliott Investment Management LP scored a knockout on Monday in its bout with one of Canada’s largest oil and gas companies, Suncor Energy Inc. SU-T +1.07%increase

What’s absurd about this brawl is that it had to happen at all.

If the Suncor board and executives – and its institutional investor owners – were doing what they’re paid to do, the Calgary-based company wouldn’t need a scrappy fund manager from Florida pounding away at common-sense themes. The folks charged with running Suncor, along with its shareholders, would ensure workplace safety was a priority, and occasionally revisit the company’s strategy to see if it suits the time.

Yet it took the arrival in April of Elliott founder Paul Singer – who previously won dust-ups with blue-chip U.S. companies such as AT&T Inc. T-N -0.19%decrease and Marathon Petroleum Corp. MPC-N +0.96%increase – to point out simple truths.

Elliott pushed for boardroom renewal because Suncor’s track record as an operator is appalling. And Elliott advocated for reviewing an outdated, conglomerate-style structure, with an eye to selling off the company’s 1,800-outlet Petro-Canada gas station chain.

On Monday, Elliott got pretty much everything it asked for. The fund manager signed off on three new directors – all industry veterans – with the potential for adding a fourth person to the 13-member board if Suncor continues to underperform. The company also agreed to a strategic review of its Petro-Canada division, which analysts and Elliott estimate could fetch up to $9-billion.

If you’re a director, executive or institutional investor in an underperforming company, here’s a key take-away from Suncor’s experience: How can I do better, and avoid the cost and embarrassment of having Elliott arrive to do my job?

There’s nothing new in the Suncor problems Elliott targeted this spring. In recent years, the company’s share price lagged peers such as Canadian Natural Resources Ltd. CNQ-T +2.84%increase, Cenovus Energy Inc. CVE-T +2.87%increase and Imperial Oil Ltd. IMO-A +2.04%increase because of its operational woes.

Workplace fatalities sum up the problem. Since 2014, at least 12 people have died at Suncor sites, more than all of the company’s oil sands peers combined. Suncor chief executive Mark Little resigned earlier this month after the latest fatality, but his departure alone doesn’t solve deep-rooted cultural issues.

One of Suncor’s new directors endorsed by Elliott is former BHP Group Ltd. executive Ian Ashby. He comes from a mining company that’s far larger than Suncor and hasn’t had a workplace fatality in more than three years. That’s expertise the energy company clearly needs. Why did it take the arrival of an activist to find a board member with Mr. Ashby’s credentials?

When it comes to the company’s structure, Mr. Little insisted Suncor was best served by continuing to own its retail division. Numerous energy companies – including domestic players such as Imperial Oil and Cenovus and former Elliott target Marathon – opted instead to divest gas stations, in part because we’re all soon going to be driving electric vehicles that can fuel up anywhere.

As of Monday, Suncor has a five-member board committee – including Elliott-backed oil patch veterans Chris Seasons and Jackie Sheppard – reviewing the retail operations “with the goal of unlocking shareholder value.” The group expects to finish this work by December and Suncor’s agreement with Elliott states their findings will be made public. Where was this sort of urgency prior to the Florida fund manager’s campaign?

When Elliott arrived at Suncor, it encountered a board chockablock with retired CEOs. The activist arrived at a company owned by major institutions – Fidelity, Mackenzie and RBC Global Asset Management. Those two groups – directors and institutional shareholders – are charged with overseeing governance at Suncor. In the wake of Elliott’s successful campaign, they now look complacent.

Mr. Singer, Elliott’s 77-year-old co-CEO, has made a US$4-billion-plus fortune over four decades by shaking up companies. After a three-month battle with Suncor, he’s claimed another prize. How can activists like Mr. Singer keep winning showdowns when all they’re doing is posing the questions that boards and long-term shareholders are meant to ask?

The case for Canada: A BlackRock senior strategist on energy, banks, bonds and why our market rules in 2022

This remarkably bad year for investing still has almost six months to go. Both stocks and bonds have already fallen by double digits. Inflation is raging, interest rates are rising and economists are assessing the risk of recession ahead. For help in navigating the twists and turns still ahead in 2022, I spoke this week with Kurt Reiman, BlackRock’s senior strategist for North America. Here’s an edited transcript of our conversation:

Kurt, we spoke previously in the summers of 2021 and 2020 and your market outlooks now look prescient. The view from here seems more challenging than before, though. Have you seen a time when investors faced more adversity?

I think that there are more headwinds today. The overarching theme is that the period of steady growth, declining inflation and lengthening business cycles is over. We’re bracing for volatility. We think that central banks are going to have to veer between focusing on the politics of inflation and focusing on the economic consequences of controlling inflation. And that means the bull market in stocks and bonds that prevailed for most of the past four decades is unlikely to repeat itself.

BlackRock’s midyear outlook sums up this view as the end of the Great Moderation, a term economists use for the years of stable inflation and growth from the mid-1980s to 2019. How should investors adjust their approach?

Risk models and the standard 60-40 portfolio allocation [to stocks and bonds] are based on historical data. They might not work. I think investors are going to have to become more granular, selective, more tactical.

Can you give us an example of being more granular, selective and tactical?

The corporate bond market has priced in a recession outcome. You’re now getting a [higher] yield on corporate bonds that’s equivalent to what you would have found, say, 20 years ago. That’s a tactical opportunity that we are taking over six to 12 months to augment returns.

Your outlook talks about bracing for volatility, which has been a constant in the pandemic years. Where will we see the most pronounced volatility in the next six months?

We will have quite a bit of volatility in stocks. We don’t think that the stock market fully reflects the downshift in economic activity. Volatility is not just on the downside and I think we’re going to see stocks oscillate on the idea that while central banks are tightening, there are still signs of economic momentum from the restart [after pandemic economic lockdowns]. There’s also the potential for certain sectors to show earnings resilience relative to expectations.

Can you give us an example of resilient sectors?

Two that stand out are energy and materials. Next year’s earnings are expected to decline, but we think commodity prices are going to be elevated. Investors have not reflected that in prices for either of these two sectors. They’re still cheap relative to their long-term history, they’re still cheap relative to the broad market.

Inflation seems to be a driver of so much in the financial world today. Which investments are performing well as inflation hedges?

Commodities are the top-performing asset this year, and commodity stocks as well.

What’s your take on how long inflation will remain at levels above the 2-per-cent mark that seemed normal in the prepandemic world?

As far as the eye can see. Let’s say that in our five-year estimates for returns and risk for a range of asset classes, we assume that inflation will be above 2 per cent – close to 3 per cent – for the U.S.

The word ‘recession’ crops up more and more in financial outlooks. What’s the view at BlackRock on the potential for a recession in Canada and the United States in the next 12 or so months?

If we get a recession, in our view it’s likely to be more muted. Some might call it a technical recession, meaning that you get a contraction of economic output for a couple of quarters. But because people are employed and unemployment rates are low, it doesn’t necessarily feel like a traditional economic decline.

How should investors construct a portfolio, given the tug of war between inflation and recession? In particular, how should those who see themselves as candidates for a balanced portfolio choose stocks and bonds?

Assuming the traditional historical split of 60 per cent stocks and 40 per cent bonds, I think there’s a tilt within bonds away from government bonds towards inflation-linked bonds and towards investment-grade corporate bonds. Within stocks, the focus is on earnings quality and resilience.

Do bonds at some point become a ‘buy low’ candidate?

We’ve been asking the question of when we are going to love bonds again and the answer is, not yet. Oddly, we really haven’t seen inflation be fully priced in with both the inflation-protected bond market and the rest of the bond market. Bond yields have room to rise.

For stocks, how bullish are you on Canada versus the U.S. market?

The U.S. market has fewer resources and more interest rate-sensitive growth. We expect further outperformance from Canadian stocks versus what you might find in the U.S. or Europe.

Bank stocks have been a disappointment in the past year – what’s the outlook in that sector?

There’s pressure on financials globally from concerns about overtightening – potentially either stalling economic activity or causing a recession. In the near term, that’s a pressure point. But we also have to reflect on the fact that the banks globally have already priced for substantial bad news. If you get a dovish pivot from central banks, it’s financials that are going to be first out of the gate.

You singled out energy stocks earlier for their resilience. What more can you tell us about the outlook for energy?

We think the price of oil and natural gas are structurally elevated and that the risk of recession could for a time cause periodic weakness. But we see a higher floor for energy prices, and for broader metals and materials as well. Energy companies are generating outsize free cash flows because they’re not incentivized to grow production in the same way as a rise in oil prices in the past would have triggered. We think this continues even if, in a recession, we see a decline in oil prices. If companies aren’t using free cash flow to invest in new production, they have to do something with it. Likely, they’ll use it to either buy back shares or increase dividends.

In closing, what’s your top piece of advice for investors concerned about how their portfolio will bear up to what’s ahead?

The way investors today are going to succeed is not with a ‘set it and forget’ approach or by abandoning assets and moving to cash. Rather, it’s about being more granular – in bonds, that means finding exposures that are better; by being more selective – looking at Canadian stocks versus U.S. stocks; and, by being more tactical. Making changes to a portfolio in a more volatile world will help to improve outcomes.

Bank of America revenue tops expectations as lender benefits from higher interest rates

• Bank of America earnings dropped 32% to $6.25 billion, or 73 cents a share, from a year earlier as the firm took a $523 million provision for credit losses.
• Revenue climbed 5.6% to $22.79 billion, edging out analysts’ expectations, as net interest income surged 22% to $12.4 billion on rising interest rates and loan growth.
• Shares of the lender fell more than 1% in premarket trading.

https://www.cnbc.com/2022/07/18/bank-of-america-bac-2q-2022-earnings-.html

Goldman Sachs crushes analysts’ expectations on strong bond trading results, shares rise 3%

• Second-quarter profit fell 48% to $2.79 billion, or $7.73 a share, driven by industrywide declines in investment banking revenue. Still, the results were more than a dollar higher than the average analyst estimate reported by Refinitiv.
• Revenue fell 23% to $11.86 billion, which was a full $1 billion more than analysts had expected, driven by a 55% surge in fixed income revenue.
• The bank’s fixed income operations generated $3.61 billion in revenue, topping the $2.89 billion StreetAccount estimate, on “significantly higher” trading activity in interest rates, commodities and currencies.

https://www.cnbc.com/2022/07/18/goldman-sachs-gs-2q-2022-earnings.html