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

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‘The clock is ticking for banks’: Morgan Stanley warns banks need to up their game before they get disrupted

Banks need to transform themselves or they will be left in the dust by new fintech companies, according to a new report.

With fintech companies raising $US58 billion globally in the first half of 2018, banks are feeling more pressure than ever to spend on their own technology. This is compounded by the fact that fintech companies don’t suffer from legacy IT systems and can provide banking services 50% cheaper than big banks.

“Pressure is mounting for banks to innovate and disrupt themselves fast, before someone else ‘eats their lunch’,” Morgan Stanley analyst Betsy Graseck wrote in the report.

Big banks are already stepping up their tech investments in response. JPMorgan’s tech budget, for example, has grown to $US10.8 billion in 2018, an increase of 14% over last year.

Tesla says DOJ asked for documents after Elon Musk’s ‘funding secured’ tweet about taking the company private

Tesla is facing a criminal investigation by the US Attorney’s Office for the Northern District of California over CEO Elon Musk’s statements about taking Tesla private, Bloomberg reported on Tuesday, citing two people familiar with the matter.

A Tesla representative said the company had received and cooperated with a voluntary request for documents from the Department of Justice but had not received a subpoena.

“Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it,” the representative said. “We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.”

Gary Cohn says Jamie Dimon would be a ‘phenomenal’ and ‘spectacular’ president

JPMorgan CEO Jamie Dimon would be ideal for the presidency, according to Gary Cohn, the former top economic adviser to President Donald Trump.

Cohn, who was president of Goldman Sachs before he joined the Trump administration, was speaking Monday, just days after Dimon said he could “beat Trump” in an election. Dimon later walked back his remarks.

“I think Jamie would make a phenomenal president,” Cohn said at a Reuters event in New York. “I think Jamie would be a spectacular president.”

Cohn added his experience in the Oval Office showed that the president’s job was “in many respects very similar” to running a complex, multinational firm.

China hits back at Trump with tariffs on $US60 billion of US goods

China has hit back at the US with a fresh series of tariffs less than 24 hours after President Donald Trump announced new tariffs on $US200 billion worth of Chinese goods, knocking the trade war between the two nations up another gear.

The Chinese Ministry of Commerce on Tuesday said it would levy tariffs of 5% to 10% on $US60 billion worth of US goods sent to China, with 5,207 individual products affected. The tariffs are to take effect September 24, the same day the latest ones imposed by the US are scheduled to begin.

“In order to safeguard its legitimate rights and interests and the global free trade order, China will have to retaliate as a response,” a statement from the ministry said earlier Tuesday, before the specifics of the retaliation were released.

The Trump administration initiated the latest round in the US-China trade war overnight. When the new tariffs take effect, over half of all Chinese goods coming into the US will be subject to duties. The US has sought to use tariffs to pressure Beijing to change some of its trade practices.

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