Corporate News

(New York)

For banks, the two worst words in the English language are “Glass” and “Steagall”, and they were just uttered by none other than the Trump White House. Sean Spicer confirmed yesterday that the administration remained committed to revisiting the Depression-era rule which separated retail banks from investment banks, a measure that was repealed in the 1990s. Trump’s Treasury secretary Mnuchin has also voiced support for a 21st century version of Glass-Steagall.


FINSUM: Banks have done marvelously since Trump was elected, mostly on the promises of deregulation and higher rates. However, if Trump pursues this course—which we do not think he will—then all those gains could be lost.

Source: Financial Times

(Seattle)

Amazon has been quickly eating away at the retail industry over the last few years, but this article shines a light on how much damage the company may do over the next three. The name of the game here should be familiar to any advisor—compound growth. Amazon’s 2016 revenue was almost $80 bn, marking another year of 25% growth. That level of growth is generally expected to continue, which means that in three years Amazon will have taken another $76 bn in sales, or as much market share as it did from its founding in 1997 to 2016.


FINSUM: Ecommerce, Amazon, and border taxes are all weighing heavily on retailers, but the Seattle behemoth may be the scariest.

Source: Wall Street Journal

(New York)

Since Donald Trump’s election there has been a lot of talking about the rise of “animal spirits” alongside the jump in the stock market. Banks are said to be entering a new golden era of de-regulation, rising rates, and profitable business. However, new data out refutes the idea of bank bullishness—banks have cut bank on lending since Trump was elected. For the first time in five years, banks have seen their outstanding loan balances decrease for two consecutive months (in December and January), and Fed data shows the trend has continued in February. One economist cited in the piece commented that the data, “Sent a shiver up my spine”.


FINSUM: This is quite eye-opening considering how much it diverges from the media-driven narrative of a bullish banking sector and a growing economy. One wonders what it says about future economic performance as this may be a leading indicator.

Source: Financial Times

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