The attacks come after state and local ransomware attacks in New York, Louisiana, Maryland and Florida resulted in the loss of significant sums.Technologyread more
China's pursuit of the Middle East may spur growth in the Islamic finance sector.World Economyread more
Twitter and Facebook have suspended accounts believed to be tied to a state-backed disinformation campaign originating from inside China.Technologyread more
United States Steel Corp will temporarily lay off hundreds of workers at its Great Lakes facility in Michigan in coming weeks, according to a filing the steelmaker made with...US Marketsread more
The report comes as Trump in recent days has lashed out over media reports about growing recession fears.Politicsread more
Beijing will lower borrowing costs for companies, but that may not boost the economy as much as some hope.China Economyread more
Stocks are bouncing higher but could be trapped in a range longer term, until there's a resolution of the trade wars.Market Insiderread more
Stocks in Asia mostly traded higher Tuesday morning as minutes from the Reserve Bank of Australia's July meeting were released. The People's Bank of China also published its...Asia Marketsread more
Powell will have the opportunity if not to walk back the "midcycle" assessment then to at least provide some further explanation about what it means.Economyread more
Apple has spent more than $6 billion on original TV shows and movies for its forthcoming Apple TV+ service, according to a Financial Times report on Monday.Technologyread more
The Business Roundtable, led by Jamie Dimon, gives a new definition of the "purpose of a corporation."Marketsread more
Slides in several top U.S. bank stocks pushed the entire financial sector into a correction Wednesday as industry leaders like Morgan Stanley, Goldman Sachs and Wells Fargo fell further into bear markets.
The S&P 500 financials sector sank more than 3.5% on Wednesday and tumbled to a level 10% below its 52-week high, formally considered correction levels. The skid in the sector group was largely thanks to banks, whacked by both falling interest rates as well as an inverted yield curve.
Smaller, regional bank as tracked by the SPDR S&P Regional Banking ETF fell to a bear market level, down more than 20% from their recent highs. They are more susceptible to a squeeze in lending margins because they don't have big capital markets businesses to offset it.
At their core, banks generate profit by lending money at a higher interest rate than at which they borrow. So, when the Treasury yield curve inverts, and long-term rates fall below short-term rates, lending institutions have little incentive to loan.
"Financial intermediaries such as banks and credit unions borrow short and lend long. Thus, when the yield on the former is above the latter, firms net interest margins compress," Joseph Lavorgna of Natixis wrote on Wednesday.
"In the worst case, profitability turns negative. In the best case, there is non-price rationing of credit, meaning credit extension only goes to highest-rated borrowers," he continued. "In either instance, the effect is to slow money and credit creation. In turn, economic output suffers."
Goldman Sachs, J.P. Morgan Chase, Citigroup, Bank of America, Morgan Stanley and Wells Fargo are all down at least 9% in August, with consumer-lending oriented firms suffering the worst losses.