Good morning! Here’s what you need to know in markets on Wednesday.
London is likely to lose its financial services passport, and investment banks that shift operations abroad quickly will benefit from a “first-mover advantage,” according to a confidential Deutsche Bank briefing seen by Business Insider. The internal note, titled “Brexit Briefing” and prepared for a July 5 board meeting, said the banks’ competitors would most likely ramp up operations in Ireland, France, Germany, and Luxembourg, where they have existing subsidiaries. A spokesman for Deutsche Bank declined to comment.
Goldman Sachs has cut its headcount by 5% since the first quarter, to about 34,800 people. On a call following the firm’s second-quarter earnings results, CFO Harvey Schwartz provided a little more detail about those job cuts. He noted that it’s not unusual for the firm to cull the bottom 5% of performers across the board each year, but the exact number can vary by business.
Microsoft announced earnings for the fourth quarter of its just-finished fiscal year 2016 on Tuesday afternoon after the stock market’s closing bell. Revenue and earnings both beat analysts’ forecasts and Microsoft stock rose 3% in after-hours trading.
Monsanto has rejected Bayer’s second takeover approach, claiming the $64 billion (£48.8 billion) cash offer was too low, in a fresh setback to the German group’s ambition to create the world’s largest agrochemicals group. The Financial Times reports that the genetically-modified seeds group said on Tuesday that its board unanimously agreed that Bayer’s revised $125-a-share proposal was “financially inadequate and insufficient to ensure deal certainty.”
The latest UK employment figures are coming. Average earnings and unemployment figures for May and June at due at 9.30 a.m. BST (4.30 a.m. ET). Unemployment is expected to remain at the record low rate of 5%, while earnings excluding bonuses are set to rise by 2.3% on a 3-monthly basis.
Shares in Nintendo opened down 8% on Wednesday after the game operator more than doubled its market value in the past 7 sessions powered by the record-breaking success of its Pokemon GO mobile game. The game, which marries a classic 20-year-old franchise with augmented reality, is on its way to becoming the first mobile game to break the $4 billion (£3 billion)-per-year wall, beating Candy Crush Saga and Supercell’s Clash of Clans, according to Macquarie Research. TechCrunch reports the game will launch in Japan on Wednesday.
Asian stock markets are treading water. Japan’s Nikkei is down 0.36% at the time of writing (6.25 a.m. BST/1.25 a.m. ET), China’s benchmark Shanghai Composite is up 0.02%, and the Hong Kong Hang Seng is up 0.87%. US stock markets barely moved overnight either.
Earnings in North America will probably be cut by a record $35 billion (£26.7 billion) to $40 billion (£30.55 billion) in the second or third quarter as businesses gauge the impact of the UK’s vote to leave the European Union. That’s according to a Bloomberg report on figures from FiREapps, which makes software to help firms reduce the effect of foreign-exchange swings. The Brexit-related headaches follow a period in which companies had a brief respite from currency volatility.
A Scottish construction group specialising in reinforced concrete foundations and superstructures for buildings, used in some of the tallest skyscrapers in London, has folded with the immediate loss of 524 jobs. The Guardian reports that the failure of Dunne Group leaves the futures of hundreds more subcontractors used by the company uncertain, with some of them owed pay. Tom MacLennan of FRP Advisory was appointed joint administrator on Tuesday. He said the group, which until then had been owned and run by its founder, Gordon Dunne, had overextended itself.
Unilever has agreed to buy razor-maker Dollar Shave Club in a deal that would expand the consumer goods group’s catalogue of men’s grooming products. Financial terms of the deal were not disclosed in a statement released Tuesday evening. Unilever approached Dollar Shave Club for the deal and is paying $1 billion (£760 million) in cash for the Venice, California-based company, business magazine Fortune reported, citing sources.