FirstFT: Goldman Sachs and Morgan Stanley chiefs see ‘inexperienced shoots’ of restoration

The chief executives of Goldman Sachs and Morgan Stanley yesterday mentioned they had been seeing “inexperienced shoots” of their struggling funding banking companies.

Talking at an business convention organised by Morgan Stanley, the financial institution’s chief government James Gorman mentioned: “We’re clearly seeing extra inexperienced shoots. I’m having extra discussions with CEOs.”

Gorman, who plans to step down as chief government inside the subsequent 12 months, mentioned it was “unlikely” Morgan Stanley would pursue any additional large-scale dismissals within the close to future after it introduced a number of thousand job cuts final month.

Goldman Sachs chief government David Solomon instructed CNBC he was additionally seeing “inexperienced shoots” and that he would anticipate to see exercise within the capital markets choose up on the flip of the 12 months.

“I might anticipate capital markets exercise to choose up as we head into 2024. On the finish of the day, folks want capital, they’ll defer a few of these actions however on the finish of the day, they’ll’t postpone them indefinitely.”

Buyers appeared to share the executives’ optimism. Yesterday the S&P 500 closed at its highest stage for greater than a 12 months, powered by a rally in massive tech shares.

Right here’s what else I’m retaining tabs on at this time:

Trump indictment: Donald Trump will change into the primary former US president to face federal prices in a courtroom in Miami at this time. Right here’s what to anticipate.

Financial information: Annual client value rises are anticipated to have slowed final month to the bottom stage in additional than two years, in accordance with economists’ predictions.

Financial coverage: The Federal Reserve is predicted to pause rate of interest rises on the finish of its two-day coverage assembly which begins at this time.

UK Covid inquiry: A public inquiry into the UK’s response to the Covid-19 pandemic that’s anticipated to final till no less than 2026 kicks off with its first public listening to.

The FT Ladies in Enterprise Summit Europe goes dwell on-line and in London at this time. Hear from leaders at BP, Magnificence Pie, Harvey Nichols and extra.

5 extra prime tales

1. The 2-year yield on UK authorities bonds surged this morning to their highest stage since 2008. Robust UK wage progress information heightened traders’ considerations about cussed inflation. The pound was additionally larger, rising to $1.256. Learn extra

2. The US Federal Commerce Fee has requested a federal court docket in California to cease Microsoft from closing its $75bn acquisition of Activision Blizzard. The deal is in critical jeopardy after the UK’s competitors regulator blocked the settlement in April. Learn extra on why the transfer piles stress on the gaming business’s largest deal.

3. Defaults within the $1.4tn US junk mortgage market have climbed sharply this 12 months, because the Federal Reserve’s aggressive marketing campaign of rate of interest rises will increase the stress on dangerous corporations with “floating” borrowing prices. Learn extra on the Goldman Sachs evaluation of PitchBook information.

4. Bond pioneer Howard Lutnick, who launched the eSpeed digital buying and selling platform within the late Nineties, is poised for a 3rd try to interrupt CME’s stranglehold on Treasury futures buying and selling. Learn extra on Lutnick’s plan to shake up the $550bn a day Treasury futures market.

5. JPMorgan Chase yesterday agreed to pay as much as $290mn to settle considered one of two bombshell lawsuits over its 15-year relationship with Jeffrey Epstein. The financial institution didn’t admit any legal responsibility to the claims of making the most of human trafficking or ignoring a number of inside warnings about their former shopper’s intercourse crimes. Learn extra

Deep dive

Almost 1.4mn kilometres of metal-encased fibre criss-crosses the world’s oceans, rushing web visitors seamlessly across the globe. However pushed by fears of espionage and geopolitical tensions, the subsea cable market is at risk of dividing into jap and western blocks, consultants say. The FT explores how the US is pushing China out of the infrastructure underpinning the web on this visible story.

We’re additionally studying . . . 

Trump and Johnson: The reactions of Boris Johnson and Donald Trump to their newest travails are strikingly related, writes Gideon Rachman. Each are fabulists for whom the reality is solely what’s politically or personally handy.

Saudi Arabia gaming: The dominion is spending billions in a bid to dominate the worldwide video games and esports sector as a part of its push to diversify past oil.

Obituary: Silvio Berlusconi, the tycoon and former Italian prime minister who has died on the age of 86, wielded energy in a way that defied the conventions of western democracy.

Chart of the day

With Russia’s invasion of Ukraine resulting in a pointy improve in defence spending and geopolitical tensions over Taiwan additionally rising, economists have turned their consideration again to an age-old query: the best way to pay for wars.

Take a break from the information

What’s one of the simplest ways to see Venice? To flee the crowds of vacationers, the FT’s journey editor Tom Robbins drove a rental boat to discover the Italian metropolis and its lagoon in a voyage of unplanned delights and moments of blessed solitude.

Extra contributions by Tee Zhuo and Benjamin Wilhelm