—— Goldman Sachs Third Quarter Profit Surges 45%; US Considers Export Cap on AI Chips; New York Factory Activity Contracts Quickly; Boeing Raises $25bn to Get Through Challenges; Charles Schwab EPS Beats Forecast; LVMH Could Pay Additional €800mn in Taxes; ASML Tanks Most Since 1998 and Drags Down Whole Sector
1. Goldman Sachs Third Quarter Profit Surges 45%
Goldman Sachs Group Inc. saw its third-quarter profit soar by 45%, driven by a surprising boost in equity-trading revenue and a strong recovery in its investment-banking business. The firm’s stock traders had their best quarter in over three years, positioning them for a record-breaking year, while Goldman’s dealmakers surpassed expectations in every key business line. However, the gains were slightly offset by a decline in fixed-income trading, which had been anticipated by the firm.
Goldman Sachs’ shares have surged 36% this year, the largest increase among major U.S. banks, and hit an all-time high on Monday. The stock jumped 3.3% in early New York trading.
The bank’s results also included a $415 million charge related to ending its credit-card partnership with General Motors Co. and shedding other smaller retail ventures. Barclays Plc announced it would take over the GM business, following Goldman’s missteps in consumer lending.
Goldman Sachs has also been working to wind down its larger credit-card partnership with Apple Inc., which has around $17 billion in outstanding balances. If Goldman exits this partnership by selling the loans at a discount, it could face a more significant financial impact.
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2. US Considers Export Cap on AI Chips
Biden administration officials are considering implementing country-specific caps on the sale of advanced AI chips made by U.S. companies like Nvidia Corp., according to sources familiar with the discussions. The proposed approach would involve placing limits on export licenses for certain nations, primarily in the interest of national security. The focus is reportedly on Persian Gulf countries, where demand for AI data centers is growing and financial resources are abundant.
These deliberations are still in the early stages but have gained momentum in recent weeks. The potential policy would expand on a recently introduced framework designed to streamline the licensing process for AI chip shipments to countries like the United Arab Emirates and Saudi Arabia. Last month, the Commerce Department’s Bureau of Industry and Security unveiled new regulations governing AI chip exports, with additional rules expected.
Neither Nvidia nor AMD, both key players in the AI chip market, have commented on the matter, while Intel Corp., another major producer, did not respond to a request for comment. The Bureau of Industry and Security also declined to comment on the discussions.
Source: Bloomberg – US Weighs Capping Exports of AI Chips From Nvidia and AMD to Some Countries
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3. New York Factory Activity Contracts Quickly
New York state’s factory activity returned to contraction in October as both orders and shipments declined, reflecting ongoing weakness in the manufacturing sector. The Federal Reserve Bank of New York’s general business conditions index dropped by 23.4 points to -11.9, marking a five-month low, according to data released on Tuesday. Readings below zero signal contraction, and the figure came in below all estimates in a Bloomberg survey of economists.
Despite the downturn, manufacturers in the state expressed more optimism about the future. The six-month outlook for overall activity rose to 38.7, the highest level in three years, suggesting that businesses are more hopeful about the economy’s long-term prospects.
The Empire State index has seen significant monthly fluctuations over the past two years. This report is the first of several regional factory indexes from other Federal Reserve banks that will be released in the coming weeks.
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4. Boeing Raises $25bn to Get Through Challenges
Boeing Co. has taken a significant step toward raising up to $25 billion, a move aimed at providing the troubled aerospace giant with the financial resources needed to weather a crippling strike and address ongoing operational challenges. On Tuesday, the company filed a shelf registration with regulators, allowing it to sell a mix of bonds and shares. This strategic move is designed to strengthen Boeing’s balance sheet and maintain access to liquidity, helping the company avoid a downgrade to junk bond status, which would lead to higher borrowing costs.
Boeing emphasized that this shelf registration gives the company flexibility to pursue various capital options over a three-year period. In addition to the potential fundraising, Boeing has also secured a new $10 billion credit agreement, providing further short-term liquidity to navigate the difficult conditions it faces.
The additional financial backing could improve Boeing’s position in negotiations with striking workers who have stalled production at key facilities in the Seattle area. The unions are pushing for higher wages and the restoration of pensions, but talks have recently broken down, with both sides standing firm on their demands.
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5. Charles Schwab EPS Beats Forecast
Charles Schwab Corp. shares surged after the company reported third-quarter earnings per share that surpassed analyst expectations and managed to reduce some of its costly debt, signaling recovery from last year’s turbulence. Schwab announced adjusted earnings per share of 77 cents, beating analyst forecasts, with adjusted net income reaching $1.5 billion, a slight increase from the previous year.
The firm also saw a sequential rise of $9.2 billion in its client transactional cash sweep, which had previously been impacted as customers moved funds in search of better yields. This increase helped Schwab lower its reliance on expensive supplemental bank funding by $8.9 billion.
Schwab is emerging from what it described as one of its most difficult years in decades. The firm faced significant challenges due to sharp interest rate hikes, which prompted customers to withdraw deposits in favor of higher-yielding alternatives, forcing Schwab to seek more expensive funding sources.
Additionally, rising rates caused paper losses on the company’s bond investments, further straining its balance sheet.
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6. LVMH Could Pay Additional €800mn in Taxes
LVMH is anticipating an additional tax bill of up to €800 million ($870 million) next year after France revealed plans to raise taxes on its largest companies to support public finances. During an analyst call on Tuesday, LVMH’s Chief Financial Officer, Jean-Jacques Guiony, indicated that the Paris-based luxury group expects to pay between €700 million and €800 million more in corporate taxes.
This comes in response to France’s recently proposed budget, which includes higher taxes on businesses and wealthy individuals to help reduce the nation’s debt. The budget outlines temporary levies on more than 400 highly profitable companies with annual revenues exceeding €1 billion, expected to generate €8 billion in 2024 and €4 billion in 2026.
LVMH, which pays 4.5% of its global corporate taxes in France, would be responsible for around 10% of the additional tax burden under these new measures, according to Guiony.
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7. ASML Tanks Most Since 1998 and Drags Down Whole Sector
Saudi Arabia’s Public Investment Fund (PIF) is poised to become a minority partner in the luxury department store chain Selfridges after acquiring the stake of the now-bankrupt Signa Group. The PIF will hold a 40% stake in both Selfridges’ properties and its operational businesses, while Thai retail conglomerate Central Group, the current co-owner, will maintain a 60% stake. Both shareholders plan to inject new investments to strengthen Selfridges’ financial standing.
The PIF has signed a binding agreement for the complete buyout of Signa’s interest in Selfridges, although the terms of the deal were not disclosed. This partnership follows the collapse of Central Group’s joint-venture partner Signa, which fell into insolvency due to a sharp rise in interest rates that exacerbated its debt issues.
Turqi Al-Nowaiser, deputy governor and head of international investments at PIF, expressed enthusiasm for the collaboration, stating, “We are pleased to be partnering with Central Group in Selfridges Group, one of Europe’s most iconic luxury department stores. This transaction allows Selfridges Group to further strengthen its position as a premier retail destination.”
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本文内容来自《Financial Times》、《Bloomberg》，以及《The Real Deal》等多家财经新闻媒体。