Proactive Investors -
- FTSE 100 session low was 7,879.51
- All US stocks indexes retreat
- Miners support as growth in China tops forecasts
More advisors for Chancellor
The Chancellor of the Exchequer, Jeremy Hunt, has appointed three new members to an advisory panel he set up in October last year to bolster the government's reputation for economic competence, including former Bank of England chief economist Andy Haldane.
The Economic Advisory Council (EAC) was established by Hunt as a palliative after his short-lived predecessor Kwasi Kwarteng’s tax cut Budget last Autumn roiled markets.
The EAC’s first four members all had a financial markets background and included two former BoE policymakers. Aside from Haldane, the latest appointments include Sir Jonathan Symonds, the chair of pharmaceuticals company GSK, and Anna Valero, an expert on productivity at the London School of Economics.
"Economic growth is essential to our long-term prospects and in the face of global headwinds, this council plays a critical role in helping our economy meet these challenges," Hunt said in a statement announcing the appointments.
Banking stories
In London, the FTSE 100 index held its gains, but on Wall Street, its blue-chip rival the Dow Jones Industrial Average remained weaker in the first hour of trading as investors digested a mixed pair of results from two banking giants.
Susannah Streeter, head of money and markets, Hargreaves Lansdown (LON:HRGV) noted: ‘’A tale of two very different banking giants has unfolded as Goldman Sachs’ was hit by a dent in dealmaking, while the good times rolled for Bank of America (NYSE:BAC), which reaped big windfalls from higher interest rates.
"The underlying story betrays more trickier times ahead for both banks. Volatility is expected to continue to affect the markets, which Goldman’s business is so highly interlinked with, while Bank of America’s net interest margins are set to be eroded as more customers scarper in the search for higher returns elsewhere, forcing it to offer better rates. Inflows from the worried customers of smaller banks, following SVBs collapse, haven’t changed the overall direction of deposits seeping away into money market funds offering higher yields."
She added: "Goldman had rolled the dice to get into the consumer banking game, but it was a gamble which hasn’t paid off. The bank offloaded part of its Marcus branded loans in the first quarter, booking a $470 million loss, with the rest of the portfolio now marked up for sale. It’s still unclear exactly what will happen to other parts of its consumer platform but for now its Apple (NASDAQ:AAPL) partnership appears to be going strong, offering a new rate on savings of 4.15% as competition intensifies for deposits.
"Bank of America sees no cracks appearing in consumer resilience, with credit quality strong. But it has multiplied the amount it has set aside for potential losses on loans in the quarter to around $930 million, and concerns will linger about the risks of bad debt rising, if as it expects, the US economy heads into recession.’’