Investors worried about Deutsche Bank’s bankruptcy are now looking at CEO John Cryan’s plan to restructure the company’s operations to get it back into profitability. Many analysts are of the view that its overhaul plans are not reaping the kind of benefits that were envisioned. Slowing economic growth along with all-time low interest rates are troubling the bank’s lending business, and energy loans are going bad. Further, stricter regulations mean added legal and compliance costs for these banks, which is putting additional pressure on their top line.
Under its “Strategy 2020” announced last year, Deutsche Bank scrapped plans to pay dividends for the next two years and it’s cutting 35,000 jobs as part of its plans to revive the bank. The bank also said it would cut operations in ten countries and cut its investment banking clients by 50% claiming that 80% of the revenues come from only 30% of clients. This involves around 4,000 job cuts in Germany, which is part of 9,000 role reductions worldwide. The bank also recently announced it had sold its British insurance business, Abbey Life, to Phoenix Group Holdings.
The bank will also simplify its legal structure, eliminating approximately 90 legal entities. Cryan has been under pressure to overhaul the bank after litigation expenses, and the market rout in Asia has pushed the bank’s valuation much lower than its rivals’ valuations.
Deutsche Bank’s shares are currently trading at distressed valuations.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.