Good morning! Here’s what you need to know in markets on Thursday.
There will not be a massive shift in financial services and professional jobs from London to other European cities for quite some time, according to the global chairman of Deloitte. “I think companies are looking at potentially looking at moving roles from London but they have been fairly thoughtful about that. No one is going to be jumping quickly,” David Cruickshank told Business Insider.
The Federal Reserve has failed Deutsche Bank and Santander under the mandated Dodd-Frank stress tests.Morgan Stanley received a conditional non-objection and must resubmit its plan. The bank has until December 29 to do so.
Stocks rallied for a second straight day overnight in the US as the calm that returned to markets following the post-Brexit chaos persisted. The S&P 500 returned to positive territory for the year, up 1.70%, the Dow Jones added 1.64%, and the Nasdaq gained 1.86%.
Asian shares are mixed. Japan’s Nikkei is up 0.44% at the time of writing (6.20 a.m. BST/1.20 a.m. ET), China’s benchmark Shanghai Composite is down 0.27%, and the Hong Kong Hang Seng is up 1.44%.
UK GDP figures are coming. The latest first quarter figures will be released at 9.30 a.m. BST (4.30 a.m. ET), with the annual growth estimate expected to be unchanged at 2% and the quarterly growth figure predicted to stay at 0.4%, as per earlier estimates. Total business investment and the national current account deficit will be announced at the same time.
Telefonica has shelved plans to sell a stake in O2, as Britain’s decision to leave the EU roiled markets and created a final, insurmountable hurdle to a 15-month sales effort aimed at cutting debt. Bloomberg reports that Telefonica was weighing options for the UK unit including an IPO, after the EU blocked its £10.25 billion ($13.8 billion) sale last month. Instead, it will consolidate O2 back into its financial statements, and no longer present the unit as discontinued operations, according to a regulatory filing Wednesday.
UBS announced a big shake-up in its investment bank. A trio of senior staff are leaving, according to a memo sent to employees by Andrea Orcel, president of the investment bank.
Britain’s banking sector is “well placed” to deal with the fallout after the country’s shock vote to leave the European Union, the minister overseeing the financial sector said Wednesday. Harriett Baldwin, addressing a retail banking conference in central London, told delegates that the industry — ravaged by the global financial crisis — had adequate capital and liquidity to weather Brexit.
JPMorgan is taking a new approach to working with tech startups. The firm is expected to launch a residency program for financial technology, or fintech, companies on Thursday in an effort to tackle strategic and security-related challenges.
One of Goldman Sachs top European bankers told MPs on Wednesday he won’t take any blame for the collapse of BHS earlier this year, which will likely put 11,000 Brits out of work and leaves an estimated pension blackhole of £275 million. Goldman gave unofficial advice to Sir Philip Green when he was selling the department store last year. Michael Sherwood, the co-head of the bank in Europe, said Goldman Sachs “absolutely do not accept blame” for what happened after the sale when asked by MPs.