Good Morning! Here’s what you need to know on Tuesday.
1. The Financial Conduct Authority has said it will carry out “a more focused investigation” into Royal Bank of Scotland’s treatment of small businesses within the Global Restructuring Group (GRG) amid growing pressure for transparency. The City watchdog, which published a summary of its near four-year-old report today, has said it is “investigating matters arising” from the report, adding it is “focusing on whether there is any basis for further action within our powers.”
2. A U.S. jury on Monday found a former HSBC Holdings executive guilty of defrauding Cairn Energy in a $US3.5 billion currency trade in 2011. U.S. prosecutors have said that Mark Johnson, formerly head of HSBC’s global foreign exchange cash trading desk, schemed to ramp up the price of British pounds before executing a trade for Cairn, making millions for HSBC at Cairn’s expense.
3. China’s ruling Communist Party on Tuesday approved an amendment to its constitution directly mentioning Chinese President Xi Jinping’s name and his “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”. No other leader has had an eponymous ideology included in the document while in office since Mao Zedong, the founder of modern China. This effectively makes Xi China’s most powerful leader since Mao.
4. Japan’s Nikkei share average edged up in choppy trade on Tuesday morning, on track for a record 16-day winning streak, while Yaskawa Electric tumbled after disappointing investors with tepid profit forecasts. The Nikkei rose 0.45% to 21,793 in afternoon trade after opening lower.
5. Brutal. There’s no other word for Ray Dalio’s latest note on the US economy, and the situation it describes. The founder of Bridgewater, the world’s largest hedge fund with about $US160 billion in management, posted the note on LinkedIn on Monday, and sets about splitting the US economy in two: the top 40% and the bottom 60%. The point of this exercise is to show that while the headline numbers show a growing, healthy economy, there’s a lot more going on under the surface that needs to be paid attention to.
6. The S&P 500 completed its longest streak ever without a 3% intraday drawdown on Monday. At the close
, it overtook the previous record of 241 days set in 1996. “I feel like a broken record, but so many times when I’m talking about 2017, I usually say ‘the last time since 1964, 1965, or 1995’ when making comparisons to 2017,” said Ryan Detrick, a senior market strategist at LPL Financial.
7. Italy’s Banca Monte dei Paschi di Siena said on Tuesday its shares would resume trading on October 25 after the market regulator approved a document for their relisting. Monte dei Paschi’s shares have not traded in Milan since December 2016, when the bank failed to raise capital from investors and had to seek help from the state ahead of an 8 billion euro rescue.
8. On Monday, Netflix announced it will raise $US1.6 billion in debt to fund its ever-increasing content budget. The company’s stock was up 0.32% in early trading to $US194.79. Netflix said that the terms of the deal will be sorted out between the company and the first buyers of the debt. The move comes after Netflix announced a content budget of between $US7 billion and $US8 billion for 2018. The company said it hopes to increase the amount it is spending on original content that it won’t have to licence from partners.
9. Boeing on Monday signed a previously announced deal with Singapore Airlines Ltd to sell it 39 aircraft worth $US13.8 billion at list prices during a White House event with Singapore’s prime minister. The airline said last week it would finalise the order during the visit as part of its bid to modernise its fleet over the next decade.
10. A new online estate agent whose backers include London’s venture capital queen Eileen Burbidge has raised £36 million. Serial entrepreneur Matt Robinson, who received early support from Burbidge’s Passion Capital and Balderton Capital, has received the funding boost from Global Founders Capital for his new company Nested, bringing the total raised to £47 million.
And finally … Business Insider is looking for nominations for the hottest young talents in British finance right now. If you, or anyone you know, is making waves in the City of London (or anywhere else in the UK) and is under 31, we’d love to hear from you. Get in touch on social media, or email: [email protected]
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