Proactive Investors -
- FTSE 100 lower ahead of US inflation print
- JD Wetherspoon cheers investors, on course for record year
- Asos tumbles after worse than expected first half loss
First Citizens posts $9.8bn gain from SVB acquisition
Sentiment indicator (NASDAQ:FCNCA), the US lender that acquired much of Silicon Valley Bank following its collapse, reported a more than 30-fold increase in the first quarter, benefiting from a gain from its purchase of the failed California-based lender.
The bank reported a preliminary gain on the acquisition of $9.82bn as it posted net income in the three-months to March 31 of $9.5bn, or $653.64 a share, up from $264mln, or $16.70 per share, in the same quarter last year.
Adjusting for this gain, net income was $306mln, ahead of forecasts for $292.8mln.
The bank said despite the macroeconomic challenges and uncertainties, "we continue to operate with solid capital and liquidity positions."
Shares were marked 2.3% higher in pre-market trading.
Meanwhile, the FTSE 100 is trundling along, now down 13 points, remaining in a tight trading range ahead of the US data.
Aviva first quarter a prelude for catalysts later in the year
Aviva PLC’s first quarter trading update is likely to be the prelude to further catalysts later in the year, according to Deutsche Bank (ETR:DBKGn).
Analyst Rhea Shah does not expect the update itself to act as a driver to the share price but will nonetheless show “mostly positive momentum continuing for the group.”
Shah has raised the price target for Aviva to 560p from 535p and retains a buy rating.
The Deutsche analyst sees Aviva as being in a quieter act - with a wait until operational improvement starts to show (likely with first half results) and the next piece of news-flow on capital return (likely with the full year results).
“We continue to view the shares as attractive, trading on 2024e cash-flow, dividend, and total return yields of 12%, 8%, and 11% respectively,” Shah stated.
Shares, after opening higher, were little changed around midday in London.
“We have been wrong” on sterling says Citi
A leading City forecaster has ripped up a previous prediction for the direction of the pound after admitting he got it wrong.
In a note on Tuesday, Vasileios Gkionakis, head of European foreign exchange strategy at Citi said “We have been wrong, plain, and simple.”
“The reality is that, while inflation exhibits some idiosyncratic persistence, contrary to what we expected, activity has proven far more resilient.”
He now reckons sterling could rise as high as US$1.30 at the start of next year after previously predicting it would drop to parity in the wake of the mini-Budget.
The pound is currently trading close to a one-year high against the dollar at US$1.26 after a boost from strengthening economic activity and a more resilient housing market.
Gkionakis said that its predictions of a “material correction” in house prices and a collapse in consumption had not come to pass.
This view was echoed by analysts at NatWest (LON:NWG), while Goldman Sachs (NYSE:GS) said earlier this month that it had adopted an “outright constructive stance” on sterling in what it described as a “new era” for the currency as the Bank of England is expected to keep raising interest rates to keep a lid on inflation.
Kamakshya Trivedi, head of global foreign exchange at Goldman, said: “Essentially, we think that the same factors that acted as headwinds on sterling in 2022—mostly natural gas prices and the relative stance of Bank of England policy—have turned to tailwinds.”
The Bank of England is expected to raise interest rates for the twelfth consecutive time to 4.5% on Thursday.
Not long now until the US inflation figures. Ahead of those, the FTSE 100 is down 15 points, trading in a narrow range.