Morning Coffee: What happens when banks’ traders get bored. Senior bankers cluster at huge, hot PE firm
Swipe left, swipe right – this is how markets move. The Brexit boost is a distant memory and optimism around Trump is evaporating – particularly after the latest email release by Trump Jr. Markets are eerily quiet, and traders are bored.
When markets staff of major investment banks are sitting around on Tinder, or finishing early to play retro video games, as Bloomberg’s interview with over 20 traders suggests, next week’s quarterly earnings season could be brutal.
The brief respite to investment banks’ ‘rightsized’ fixed income departments has likely come to an end in Q2. Revenues are likely to have dropped by 16% across five major U.S. banks, according to analyst estimates, with Goldman Sachs likely to see another bleak quarter with a 23% decline and J.P. Morgan could be down 17%.
It’s not all bad. Senior traders are being encouraged to take vacation, managers are organising team outings, sales teams are being hired to take advantage of rivals’ downsizing. But, trading teams are waiting for a major event – a shift in monetary policy, another surprise – to spur markets into action.
“As a salesman or trader, it does get to the stage where you go, ‘Christ, what am I going to do for the rest of the day?’” said Chris Wheeler, a bank analyst at Atlantic Equities told Bloomberg. “I don’t think anyone is going to be that keen to be on the desk when it’s so quiet. The danger is people get quite bored.”
Fear not, “something always blows up over the summer”.
Separately, senior bankers are starting to cluster around one hot technology focused venture capital fund. SoftBank’s humungous $93bn Vision Fund has just hired Michael Ronen, a partner and co-chief operating officer of Goldman's global technology, media and telecom group, according to Sky News. Ronen, a former intelligence analyst in the Israeli Airforce who joined Goldman in 1998, has joined SoftBank as a partner.
He’s also the one of many senior bankers to turn up to SoftBank’s VC fund in the past month. Colin Fan, the ex-head of Deutsche’s corporate banking and securities arm, joined in June, following on from Rajeev Misra, the bank’s former head of global credit trading, as well as Goldman MD Saleh Romeih and Morgan Stanley banker Alok Sama.
Don’t focus on the initial Brexit job moves – they’re just the beginning, says Jamie Dimon (Financial News)
Paris isn’t down – French PM said it should be the Brexit location of choice (Financial News)
Moving clearing out of London will benefit the U.S. and Asia rather than the EU, says HSBC’s Stuart Gulliver (Financial News)
Bankers are buying tiny apartments in Frankfurt in order to commute from London at the weekend (Evening Standard)
SocGen could relocate 400 jobs from London to France (Reuters)
Meet your new hedge fund intern – a UK MP (Financial News)
Sumitomo Mitsui, which made a recent major hire in London, is taking on 250 staff internationally (Bloomberg)
The risk of Donald Trump being impeached is up significantly after Trump Jr’s email release, says Citi (Financial Times)
Rhodri Philipps, Viscount St Davids, has been convicted of sending menacing messages to anti-Brexit activist Gina Miller (Financial Times)
The best places to drink in NY’s finance district (Business Insider)
The Google engineer and “high couture” (NY Times)
Image: Getty Images