—— BlackRock AUM Surges by $80 Billion; WHO Announces Aspartame Carcinogenicity; Citigroup Credit Card Revenue Soars; JPMorgan Net Profit Hits Record High; US Consumer Sentiment Index Reaches 2-Year High; Blackstone Sells Two Florida Warehouses; US Top 1% Income Threshold Rises
1. BlackRock AUM Surges by $80 Billion
According to BlackRock’s latest Q2 report released today, the firm’s assets under management (AUM) increased by $80 billion, soaring to $9.4 trillion, boosted by the recent stock market rally.
Long-term investment products, including mutual funds and index ETFs, attracted a total of $57 billion in net inflows, slightly below analysts’ expectations of $81 billion.
During the quarter, BlackRock’s ETFs saw $48 billion in new inflows, with $35 billion and $23 billion flowing into fixed income and cash management products respectively. Investors purchased $43 billion of equity products, falling short of the $210 billion expected by analysts.
Adjusted net profit rose 25% year-over-year to $1.4 billion in Q2, even as revenue fell 1%.
The S&P 500 index rose 8.3% during the quarter and officially entered a technical bull market in early June.
BlackRock and other firms have benefited from the boom in Nvidia and other AI-related stocks.
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2. WHO Announces Aspartame Carcinogenicity
Today, the World Health Organization (WHO) announced in a report that based on limited evidence, the artificial sweetener aspartame may be carcinogenic.
However, WHO and the United Nations Food and Agriculture Organization (FAO) jointly stated that if consumption remains below the currently recommended daily intake, there is no significant health risk.
Francesco Branca, head of WHO’s Department of Nutrition and Food Safety, said that further in-depth research on aspartame’s carcinogenicity is needed, but he advises consumers to drink more water and reduce their intake of sugary or artificially sweetened drinks.
WHO classifies carcinogens into four categories: carcinogenic, probably carcinogenic, possibly carcinogenic, and not classifiable; aspartame falls into the second least severe category.
Experts recommend reducing the consumption of sugar-free drinks and increasing daily water intake.
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3. Citigroup Credit Card Revenue Soars
Today, Citigroup, the world’s second-largest credit card issuer, released its Q2 earnings report.
Benefiting from high interest rates and higher credit card balances, revenue from Citigroup’s US personal banking division rose 11%, partially offsetting the 78% increase in consumer loan charge-offs.
Overall, Citigroup’s Q2 earnings per share (EPS) came in at $1.33, slightly above analysts’ expectations.
During the quarter, Citigroup’s costs rose 9% to $13.6 billion, including over $100 million in severance pay for 1,600 laid-off employees.
CEO Jane Fraser said that declining trading revenues continue to present significant challenges.
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4. JPMorgan Net Profit Hits Record High
JPMorgan Chase & Co. today announced that Q2 net profit surged 67% to $14.5 billion, including $2.7 billion from the acquisition of First Republic. Return on common equity rose to 20%.
JPMorgan now expects net interest income to rise 30% this year, higher than its previous forecast of 26%.
For banks more reliant on investment banking and trading like Goldman Sachs, results may not be as strong — analysts expect Goldman’s Q2 return on equity to be the lowest since David Solomon became CEO five years ago.
A series of economic indicators and bank earnings reports have made a “soft landing” increasingly likely.
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5. US Consumer Sentiment Index Reaches 2-Year High
Earlier this month, the University of Michigan’s Consumer Sentiment Index rose by 8.2 points to 72.6, its highest level since September 2021, mainly due to easing inflation and a still-healthy labor market.
However, short-term inflation expectations rose from 3.3% in June to 3.4%, though still below the peak of 5.4% seen last year. Consumers expect annual inflation to average about 3.1% over the next 5 to 10 years.
Although consumer sentiment remains below pre-pandemic levels, it is steadily recovering, supported by a resilient labor market.
Consumers expect lower unemployment next year and believe wage growth will keep pace with inflation.
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6. Blackstone Sells Two Florida Warehouses
Prologis, one of the largest industrial property owners in the US, has acquired two South Florida warehouses from Blackstone for $92 million. These warehouses are part of a larger $3.1 billion portfolio.
Blackstone had purchased the land for the two properties in 2011 and 2019 for $3.3 million and $9.6 million respectively.
In this deal, Prologis paid $50.9 million for the industrial property in Miami-Dade County, covering 187,800 square feet. It also paid $41.1 million for a 153,500-square-foot warehouse in Pompano Beach.
Based on current rental prices, the capitalization rate is approximately 5.75%.
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7. US Top 1% Income Threshold Rises
According to a new report from financial data firm SmartAsset, the average annual income for America’s wealthiest 1% of households is now about $650,000, though thresholds vary by state.
In Connecticut, households need $953,000 in pre-tax annual income to join the top 1%. Massachusetts also has a threshold exceeding $900,000.
New Jersey ranks fourth, with a threshold of $817,000, slightly higher than New York State’s $777,000.
SmartAsset economist Jaclyn DeJohn notes that now is a relatively easier time to enter New York’s top 1%.
The top 1% of households in the US collectively hold more than one-third of the nation’s wealth.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.