FirstFT: Buying and selling frenzy boosts brokerages and Wall Road banks

At this time’s agenda: HSBC’s retail banking assessment; Trump invitations Xi to inauguration; SEC sues Cantor Fitzgerald; Massive Learn on Britain’s housebuilding woes; and from FT Journal, the El Husseinys’ fall

Good morning. We finish this week with a have a look at how Donald Trump’s election win has sparked a buying and selling frenzy, as expectations for sweeping coverage adjustments have added gas to a US inventory rally.

How massive is the bounce? Buying and selling volumes in US equities rose 38 per cent in November from the identical month in 2023, reaching ranges not seen because the meme inventory craze of early 2021, in keeping with exchanges operator Cboe International Markets. Buying and selling exercise has been boosted extra broadly by a powerful yr in US markets, with Wall Road’s S&P 500 index rising 27 per cent yr up to now to a collection of document highs.

Who’s profiting? The jolt of buying and selling exercise has benefited Wall Road banks and brokerages most well-liked by retail shoppers. JPMorgan Chase’s retail banking chief mentioned its buying and selling revenues for the ultimate three months of 2024 have been set to rise greater than 15 per cent from a yr earlier, triple the 5 per cent forecast by analysts previous to Trump’s win. Citigroup anticipates its fourth-quarter buying and selling income to rise as a lot as 19 per cent from a yr in the past.

Robinhood mentioned fairness buying and selling volumes grew 16 per cent between October and November, whereas Interactive Brokers mentioned its each day common income trades rose 17 per cent. Shares in each brokerages have far outpaced the S&P 500 prior to now three months. Right here’s extra on the surge in buying and selling.

• M&A: Dealmakers are gearing up for a strong comeback below Trump, however his antitrust appointments recommend a extra advanced actuality.

Right here’s what we’ll be watching within the days forward:

• Financial information: The EU has October industrial manufacturing and third-quarter labour figures, whereas the UK reviews GDP estimates for October. The Financial institution of England and Ipsos publish their inflation attitudes survey, whereas GfK has its client confidence survey for Britain.

• Georgia: The nation holds elections for a brand new president tomorrow, amid a political disaster over EU accession and a Russia-leaning authorities.

• Center East: Syria’s important border crossing with Jordan is set to reopen on Sunday, the nation’s de facto finance minister advised the Monetary Instances.

• Nasdaq 100: The index broadcasts its annual reshuffling of constituent shares in the present day.

5 extra prime tales

1. HSBC is reviewing its retail banking operations outdoors the UK and Hong Kong, a transfer that might see it considerably reduce operations in some nations because it seeks additional price cuts. Mexico is likely one of the markets below assessment, in keeping with individuals aware of the discussions. Learn the complete story.

2. Donald Trump has invited Xi Jinping to his inauguration subsequent month in an early signal that the US president-elect intends to renew the high-level engagement with the Chinese language chief that marked his first time period. Trump’s incoming White Home press secretary mentioned he needed to create an “open dialogue” with nations that have been American adversaries.

3. The US securities regulator has sued Cantor Fitzgerald, the brokerage led by Donald Trump’s commerce secretary nominee Howard Lutnick, for allegedly making deceptive statements to buyers within the lead-up to 2 public choices that raised $750mn. The Securities and Trade Fee mentioned the brokerage had agreed to pay a $6.75mn penalty with out admitting or denying legal responsibility.

4. Unique: The UK chancellor has dismissed requires an HS2-style line north of Birmingham, saying she won’t give “false hope” to proponents of constructing a brand new railway. Rachel Reeves advised the FT that the federal government’s transport focus was “connectivity within the north of England” slightly than on the West Coast mainline. Jennifer Williams has extra from Manchester.

5. The European Central Financial institution lower rates of interest by a quarter-point to three per cent yesterday because it watered down its hawkish language and warned that progress could be weaker than it had beforehand forecast. Analysts say the fourth discount in borrowing prices since June, which brings the ECB’s benchmark fee to its lowest stage since March 2023, has opened the door to additional cuts.

How effectively did you retain up the information this week? Take our quiz.

The Massive Learn

The UK goals of kick-starting a housebuilding growth, however the development sector depends closely on migrants to plug a expertise hole. The scarcity might current a political dilemma for the Labour authorities, which has promised to carry down web migration. Can the nation discover sufficient employees to “get Britain building”?

We’re additionally studying . . . 

• The El Husseinys’ fall: A distinguished household made a fortune working for autocrats. Who was actually in charge when every part fell aside?

• Crypto’s golden period: With Donald Trump promising a friendlier method to the trade, listed here are the fashionable tycoons who stand to profit.

• Poster little one of DEI: The president-elect could also be dangerous information for variety, fairness and inclusion, however his White Home picks show its advantages, writes Stuart Kirk.

Chart of the day

The pound hovered near its highest stage in opposition to the euro because the Brexit vote because the European Central Financial institution lower rates of interest and buyers guess on diverging fortunes for the UK and Eurozone.

Take a break from the information

From vineyards within the Andes to rhinos in Zimbabwe, writers together with Pico Ayer and historian William Dalrymple share their journey discoveries — and disappointments — of 2024.