10 things you need to know in markets today

Good morning! Here’s what you need to know on Friday.

1. Swiss banking giant Credit Suisse reported on Friday that its second-quarter profit rose from a year earlier, as revenues increased slightly. The bank posted net revenues of 10.7 billion Swiss francs in the first half of 2017, up 9% year on year. “We are now midway through the execution of our three-year strategic plan and our strategy is working: we are making good progress against our key objectives,” CEO Tidjane Thiam said.

2. Fellow Swiss lender UBS also beat earnings expectations for the second quarter, largely down to a strong performance from its wealth management arm. UBS reported pre-tax profits of 1.7 billion Swiss francs for the three months to end June, up 14% year-on-year. “Considering market conditions, the second quarter results were very good and contributed to a strong first half of the year. Our global wealth management business in particular delivered an excellent performance,” Sergio Ermotti, the bank’s CEO said.

3. Chancellor Philip Hammond is seeking a simple “off-the-shelf” transition deal for Britain as it leaves the European Union, according to a report from the Financial Times. Under Hammond’s plans, British firms would “maintain current trading relations with Europe for at least two years after Brexit.” That would then be followed by a further “implementation phase,” as Britain and the EU finalise the terms of a trade deal.

4. British consumer morale has sunk back to depths hit just after last year’s Brexit vote and worse may be to come as households’ view of the broader economic situation dropped to a four-year low, according to a survey on Friday. Market research firm GfK’s consumer confidence index fell to -12 in July from -10 in June, a one-year low and slightly below the median forecast in a Reuters poll of economists.

5. Amazon’s second-quarter report fell well short of Wall Street’s expectations. The company’s earnings missed analysts’ forecasts by more than a dollar a share. It also offered a disappointing outlook for the third quarter. Amazon posted revenues of $US38 billion.

6. Delta Air Lines and China Eastern Airlines announced that they have each purchased 10% of Air France-KLM. Delta and China Eastern’s stake in Air France-KLM comes in the form of new shares from capital increases valued at $US875 million. In addition, Air France-KLM has agreed to purchase a 31% stake in Virgin Atlantic Airways from Sir Richard Branson’s Virgin Group valued at $US287 million.

7. The Bank of England has appointed Sir Dave Ramsden as its new Deputy Governor for Markets and Banking, filling a spot that has been empty for several months. Ramsden, a civil servant who is currently the chief economic adviser to the Treasury, will take up his new role from September 4.

8. Legendary investor Byron Wien says the stock market is entering uncharted territory. The fact that stock indexes continue to make new highs as the Fed prepares to shrink the assets it holds troubles Wien, the vice chairman of Blackstone’s private wealth solutions group. “This divergence is disturbing, particularly since the Fed is contemplating a balance sheet shrinkage starting in September,” he wrote in a client note.

9. The US House of Representatives passed a $US788 billion spending bill Thursday that combines a $US1.6 billion down payment for President Donald Trump’s controversial border wall with Mexico with a whopping budget increase for the Pentagon. The 235-192 vote both eases a large backlog of unfinished spending bills and gives Trump and his House GOP allies political wins heading into the August recess.

10. Chinese smartphone maker Xiaomi Inc said on Friday it had signed a deal for a new $US1 billion loan to accelerate its drive into brick-and-mortar stores and help a push overseas. The three-year syndicated loan comes as China’s tech giants look to diversify their businesses as e-commerce growth slows, with rivals from Baidu Inc to Alibaba pushing into new areas from cloud computing to artificial intelligence.