Here’s what’s been happening on Wall Street overnight

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A $US150 billion investment chief breaks down a ticking time bomb in markets that traders are foolishly ignoring

With the market fresh off one of the more difficult and volatile weeks in recent memory, one might assume that all negative scenarios have been covered.

After all, when the market is hit in such hard and swift fashion, people are usually quick to point fingers. The process can unearth all sorts of dormant headwinds.

Which is why it’s so surprising that no one seems to be talking about the precarious and potentially damaging situation that exists in the US credit market.

But it’s not lost on Brad McMillan, the chief investment officer of the $US150 billion Commonwealth Financial Network. He’s specifically worried about the effect that higher interest rates – one of the primary culprits of this past week’s wreckage – will have on corporate debt.

Goldman Sachs’s bond trading unit is still trying to find its way – and it represents a key challenge for new CEO David Solomon

If Goldman Sachs’ third-quarter results are any indication, the bank’s investors may be hoping that the firm can bring its investment banking playbook to its struggling fixed income division.

The bank reported $US1.3 billion in revenue fom the unit, missing analyst estimates and leaving some to wonder how the division, once a Wall Street darling, would again find its footing. Meanwhile, the investment banking division that Solomon ran before becoming president in December 2016 exceeded estimates and helped the firm beat profit forecasts.

Chris Kotowski, an analyst at Oppenheimer, said fixed income trading was his “main complaint” about Goldman’s earnings. “Peers reported mixed results too, but this is a bit below average,” he said in an analyst note.

The challenge for Solomon will be to bring his winning formula over to the securities division. Goldman insiders say Solomon is likely to take a more client-friendly approach within the trading unit, which has often preferred complex, more episodic transactions for hedge funds that command higher fees rather than more vanilla products that are lower margin and preferred by corporations.

BlackRock is banking on a business that could reach $US12 trillion in the next five years, according to its CEO

BlackRock is betting on the explosive growth of exchange-traded funds, an asset class that has already propelled the firm to become the world’s largest asset manager.

The ETF market, which includes $US4.7 trillion worldwide in assets, could jump to $US12 trillion in the next five years, CEO Larry Fink said on the firm’s earnings call on Tuesday.

Fink echoed these remarks from a report published by the firm earlier this year.

BlackRock’s booming iShares exchange-traded fund business helped boost the firm’s earnings during the quarter,as institutional investors, meanwhile, pulled money out of the markets.

Wall Street research firm Autonomous is embroiled in a lawsuit over claims of gender-pay discrimination and retaliation – and it’s getting uglier

The boutique equity-research firm Autonomous Research is embroiled in a lawsuit by a high-ranking female partner over claims of gender-pay discrimination and retaliation.

Erin Baskett, a managing partner as well as CFO and chief compliance officer of the firm’s US office, alleges she was paid significantly less than male peers.

Baskett, who continues to work at the firm, also claims that when she raised these complaints, as well as concerns regarding what she alleges were regulatory and compliance lapses, senior executives retaliated against her.

Autonomous denies any wrongdoing in the matter.

After contentious legal arguments, in which a court dismissed some of Baskett’s claims, the case is now moving forward to the next phase of litigation.

Both parties have sent firm-wide emails since the latest court decision conveying their side of the story.

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