ICI Reports 13th Consecutive Week of Massive Domestic Equity Outflows As Banks Start To Panic...
US banks with Wall Street operations are bracing for a slump in trading profits this year after the third quarter got off to a poor start, with global economic uncertainty and Europe’s sovereign debt woes leading to a slowdown in market activity in July...
“July was a miserable month for trading,” one senior banker said. “If August and September don’t rebound sharply, banks will be forced to cut jobs.”
The squeeze in trading profits highlights the rising importance of groups’ consumer and commercial banking operations, whose performance is improving as the economy heals.
The lack of activity led many banks to miss internal targets for trading revenues in both fixed income commodities and currencies – a key recent driver of profitability – and equities...
Retail investors have also shunned stocks. US equity mutual funds have been hit by 12 straight weeks of outflows totalling $40.7bn, says the Investment Company Institute.
---ZeroHedge, 8/14
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