With the indictment of two former senior Goldman Sachs bankers, accused by US prosecutors of paying bribes, stealing and laundering money from a Malaysian sovereign-wealth fund, the Wall Street giant finds itself at the center of one of the world's largest-ever financial scandals.
China's technology industry is developing into a serious rival to Silicon Valley, but there are political hurdles ahead. Bloomberg QuickTake explains how China's tech companies went from copycats to cutting edge, and why the US government is crying foul.
Earlier this month Z/Yen published their global financial centres index which stated that for the first time in 15 years, New York has overtaken London as the world’s top financial centre. The report focused on a number of factors including infrastructure and reputation and was combined with a survey to show the most attractive financial cities. To follow on from this, job search platform Joblift looked into the financial job markets in both London and New York to find out if these results matched or contradicted the Z/Yen conclusions. While New York may have become the most attractive worldwide financial centre, Joblift’s results show that the crown still lies with London when it comes to job availability and growth.
London has more than twice the number of vacancies and three times as much job growth
According to Joblift, 124,788 financial job vacancies have been posted in London in the last 12 months. In comparison, New York has been the location of 49,526 financial vacancies in the same time period, around 2.5 times less than in the UK’s capital. To further bolster London’s claim as the financial job market top spot, vacancies in the capital have increased at three times the rate of New York’s. While the US city’s financial job market increased by 1% each month on average in the last 12 months, London’s market saw a 3% average rise.
Both cities share the most in-demand professions and top employers but vacancies in new york were more secure
Despite the differences in number of vacancies and job growth, the financial job markets in the two cities have a lot in common. Accountants are the most in-demand professionals in both cities, making up 12% of the job market in London, and 9% in New York. They are followed by Finance Managers in London (11%) and Economists in New York (6%), with these professions switching in each location as the third most in-demand – Economists in London (4%), and Finance Managers in New York (6%). Additionally, while not in the same ranking order, JP Morgan, Goldman Sachs and Morgan Stanley were the top employers in both New York and London. However, while the same professions are in demand, jobs in New York were more secure. In the last year, 87% of the finance vacancies advertised in New York were for permanent contracts, while postings offering the same contract type in London made up just 75% of the capital’s financial market.
(Source: Joblift)
The biggest risk to stock market investors right now is US Federal Reserve policy error - not a sharp bond market sell-off.
Tom Elliott, International Investment Strategist at deVere Group, is speaking out as financial markets have shown increasing nervousness in recent days.
Mr Elliott comments: “Investors in all assets can be forgiven for fearing a bond market sell-off, given the recent sharp increase in Treasury yields. Higher Treasury yields are likely to lift yields in other core government bond markets, increasing the risk-free rates that other assets have to compete against.
“But if the stock market rally is about to end, is it really going to be because bond investors become afraid of the growth and inflation risks of the strong US economy?
“This is, surely, not realistic given the modest inflation data.
“Fed chair, Jay Powell, has repeatedly made clear his nervousness of reading too much into the recent uptick in US wage growth, and the tightening labour market, which are often considered key determinates for inflation.
“Indeed, it is worth noting not only that September’s hourly wage growth, of 2.8% year-on-year, was actually lower than August’s 2.9%, but also that inflation expectations are broadly stable.
“The Fed’s preferred measure of inflation, the core PCE index, stands at just 2%.”
He continues: “With three more interest rate hikes expected next year, which would take the Fed’s target range to 2.75% – 3%, there is a growing risk not of inflation derailing the U.S economy, but Fed policy error whereby growth is harmed because of an overly-aggressive policy mix.
“This would include not only raising interest rates too fast, but also its quantitative tightening programme that is withdrawing $50bn a month from the U.S. economy, and so contributing to higher bond yields.”
Mr Elliott concludes: “Therefore, the risk to stock market investors comes not from a sharp bond market sell-off which raises the risk-free yields on Treasuries. It is from the Fed ignoring its chair’s own advice and tightening monetary policy faster than the American economy can stand.”
(Source: deVere Group)
We speak with thought leader Andrew Morris - a wealth transfer expert who’s dedicated his career to helping clients plan, grow and protect their assets. For over 25 years now, he’s been passionate about helping families with setting up charitable remainder trusts and assisting families with special needs to secure their future through the use of insurance. As a Social Security Analysts, Andrew helps clients maximise and understand their Social Security benefits to optimise their retirement planning.
What trends are you seeing in the current insurance landscape and how do you intend to keep up with these?
The current trend I see in the industry is the tremendous need for an alternative form of guaranteed lifetime income in addition to social security for the aging baby boomer population. Since many major corporations no longer offer a defined benefit type pension plan, many retirees are looking for ways to have a guaranteed lifetime income stream which can only be offered through insurance companies and their living income benefit riders. The recent DOL (Dept. of Labor) legislation regarding the fiduciary rule has made the return of guaranteed lifetime benefit riders popular again, since many companies have now lowered fees and have simplified the benefits to adhere to the new rules.
Another trend that I see in the insurance industry is the need to make sure that older whole life policies are upgraded to make sure that the aging 76 million baby boomer population has adequate life insurance coverage. With the increase in American retirees living longer and the standard life expectancy numbers increasing from age 78 to age 85, life insurance mortality tables had to be updated a few years ago to reflect these longer life expectancy rates. This increase in the mortality tables has left many old policies old and ‘underinsured’. Clients can now enjoy receiving larger coverage increased face values for old permanent life policies for a lower cost or the same amount due to the recent change in mortality tables. The only way I can keep up with the amount of new service for these older policies and aging clients is through the use of technology.
What is the biggest challenge the US insurance sector faces today? What would be your solution?
The biggest challenge the insurance industry faces today is technology and the ability for insurance companies that are considered old and antiquated to keep up by updating their systems for servicing and cybersecurity. As a result, I anticipate that there will be further consolidation within the insurance industry over the next couple of years. With the baby boomer population turning 65 at a daily rate of 10,000 per day, it is an enormous number to keep up with. So, the companies that are not up to speed technology wise will fall by the waste side and will be acquired by larger insurance companies.
The only solution for companies that are currently behind in their technology would be to establish a new strategic alliance or joint venture, where they partner up with a third-party vendor and potentially outsource the work. Very few insurers have all the resources they need to become truly cutting edge. Technological advances are changing business and operating models, which is challenging to an industry that is accustomed to slow evolution.
What do you find businesses commonly fail to consider when it comes to insurance?
Businesses commonly fail to consider the fact that that they are ‘underinsured’ in relation to price. Many businesses will value good price as opposed to the proper amount of insurance for their business. Having a good insurance adviser or consultant can help business owners who are underinsuring themselves to start saving them money. Insurance is one of the most important needs for a small business, yet it is something that many owners skimp on. People don’t reevaluate their insurance needs as their companies grow and numerous small businesses don’t have business interruption insurance in addition to property and casualty coverage, even though it is something that can put their companies and livelihoods at risk. I think that it is vital for company owners to consider and be mindful of the damaging impact that an emergency incident can have if your business is not properly insured.
New research reveals a UK technology market which has attracted the eye of US businesses and seen a huge increase in transactions, with acquisitions of UK technology companies up 386% in 2017 than there were in 2009).
Of the 247 UK companies to have exited into the US in 2017, almost a third (32.3%) of those were technology companies, followed by manufacturing, which has also seen an increasing interest from the US over the same period.
While technology has been one of the principle drivers of the UK M&A market in the mid-market, the results highlight there has also been a wider trend of increasing activity from US acquirers. Overall, the UK has seen the acquisition of companies below £1billion increase by 86% over the last decade (2009 to 2017), with sectors such as Business Services and Manufacturing having increased in the number of sales to US acquirers.
Commenting on the findings, Andy Hodgetts, Senior Corporate Finance Manager at Buzzacott said: “The UK’s technology landscape is changing dramatically and is far more active than it was just under a decade ago. Silicon Valley is no longer the sole proprietor for developing new innovations, the UK is a hotbed for talent, and in the US’ acquisitions of UK companies, they are gaining access to that talent pool.
Hodgetts continued: “There has been a lot of uncertainty around Brexit and what it means for the UK, which has left many businesses unsure as to when might be a good time for them to sell. What we are seeing however is that there are a number of opportunities and buyers out there, especially in the US. For UK companies that are planning on exiting, but have waited due to the uncertainty the UK faces, it is important to not just think about companies within the UK that might want to acquire the business, but explore internationally too as there are plenty of buyers available, whatever the sector.”
(Source: Buzzacott)
Towards the end of July the price of gold steadied after US President Donald Trump who criticized the Federal Reserve's interest rate tightening policy. In more recent events, Trump doubled tariffs on Turkey’s steel and aluminium.
In the US gold prices have hit a 17-month low, falling down to the $1,200 mark and are increasingly trading lower. In other countries the price of gold continues to rise.
Daniel Marburger, Managing Director at Coininvest told Finance Monthly: “Gold prices soar in times of uncertainty, which is why many people expected gold price to fall once Trump was elected.
“Throughout his presidency, Trump has proved to be a controversial character and we’ve seen movement in gold price reflect this.
“He has had a positive impact on the value of the US dollar which usually lowers the gold price, however, current trade wars Trump has started with the EU, Canada and China are offsetting this, slowing the decline.
“High interest rates make gold a less attractive investment, unlike other investments it doesn’t offer interest. It will be interesting to see how the US president’s decisions will impact the value of gold throughout the rest of his presidency – especially as we approach the mid-term elections in November.”
Last week it was announced that the UK has overtaken the US on fintech investment for the first half of 2018. Simon Wax, Partner at Buzzacott below looks at how companies must address and identify their sweet spot in the market to ensure long term success.
It’s terrific to see the UK is leading the way when it comes to fintech. Funding is at an all-time high and the UK should certainly feel proud of its ability to attract more investment into the sector than any other country.
To secure continued success for the UK’s fintech scene, it’s vital that these young companies are able to scale successfully, and to do this, they will need to overcome some challenges. Increased uncertainty around Brexit and how this will impact the UK’s access to the digital single market, the availability of skilled technical workers and even funding for R&D are all key risks for small businesses.
Scaling fintech companies need to focus their efforts on long-term success, not being the biggest money maker. The risk is companies may lose sight of what they originally set out to do, a trap in which young companies can easily fall into, when not careful. Leaders must take a methodical and responsible approach to fundraising, bring in investment which matches their aims, rather than taking the first offer of funds. There are many options out there such as UK R&D funding, through sources such as the Industrial Strategy Challenge Fund or Innovate UK. Scaling fintech companies must address and identify their sweet spot in the market, and develop a business plan focused on which best suits their model. That way, scaling businesses can secure their success in the market, and grow in a way that is right for their business.
The investing landscape has changed significantly over the last decades. Historically, the large banks have been happy enough to manage investors’ money and keep hold of the information. For those wanting to become involved, it was too tough, or too expensive. Here Finance Monthly hears from Kerim Derhalli, CEO at Invstr, on the potential for fintech to succeed in a complex evolving landscape.
Now, with an unprecedented amount of tools at our fingertips to make the process of committing cash to the stock market – or indeed other assets such as bonds – much easier, you’d expect us to be experiencing a golden age for financial independence and empowerment.
Despite this, the data tells a very different story. A recent US study by Gallup, for example, found that the combined age of adults younger than 35 with money in the stock market in 2017 and 2018 stands at 37%, down from 52% in the two years leading up to the financial crash.
While it’s true that a lingering distrust of financial institutions is impacting millennial sentiment towards stock ownership there’s a bigger story here of a more fundamental failing across the fintech industry – which is still not even scratching the surface of its potential.
Let’s look at this in simple, real world terms. If I were to stand on a street corner and hand out £5 notes to anyone passing by, I'm sure I would have several million people taking up the offer of free cash. If I stood on a digital street corner, the uptake would be even higher.
However, fintech brokers who have deployed these same techniques have apparently failed to attract huge followings. What are they missing?
Well, what many of these platforms are failing to understand is that investing is a process, not an event. Understanding what is going on in the world or at an individual company level, reading the news, following the markets, looking at charts, reading research, talking to friends, peers or strangers to get investment ideas are all part of the process.
The last part, the buying and the selling, only represents 1% of the investment process, and is by far the least exciting part of it. Companies that make the transactional and comparatively dry element the focus of their product are missing the fundamental quality of what makes fintech such an exciting proposition – and doing wannabe investors a disservice in the process.
For me, fintech is the manifestation in the financial markets of the information revolution. Whether it’s about internet or social networks, the sharing economy and now cryptocurrencies – it’s all about empowering individuals.
With investing apps, this means giving users access to data that was formerly the reserve of the large financial institutions and teaching them to interpret how real world events can impact on the stock market.
This is excellent practice for investing, whether via a mobile app or otherwise, where those who truly profit chart a path by making their own investment decisions rather than relying on passive funds that track the major exchanges.
Ultimately, it’s about putting people in a position where they can manage their own money. The disruption we’ve seen in every other consumer sector, where the empowerment of individuals has done away with intermediaries is the real opportunity. If more companies in the fintech industry can capture that space then the impact on finance will be truly transformative.
Ingmar Rentzhog is a Swedish entrepreneur who founded and serves as the CEO of We Don’t Have Time, a tech start-up aiming to become the world’s largest social media platform for the climate crisis. He is also a Climate Reality leader trained by US former Vice President Al Gore. Here Ingmar tells all about his company, its mission and accomplishments in its endeavour to raise awareness of and combat the ways in which we contribute to climate change before we run out of time.
What inspired the foundation of We Don’t Have Time? How has it faired compared to your initial goals?
The election of Donald Trump for US President was a climate wake-up call. He got me and many others to wake up and realise that our leaders won’t solve the climate challenge by themselves. We are the ones who need to do it, all together. My first step was to set up a small team of professionals that I knew well, and like myself were dedicated to the cause. Earlier this year, we raised US$1.2 million through the equity crowdfunding platform FundedByMe. It was a success and we got 200% oversubscribed where we attracted over 430 investors from more than 15 countries all over the world, a mix of both ordinary citizens and angel investors. Right now, we are concentrating our efforts on building our platform. So far, as a kind of “teaser”, we have launched three action tools, one for sending climate love and climate bombs to chosen world leaders’ tweets, one for making a short selfie-video with a personal climate resolution, and a tool for carbon compensating your emails.
What motto does We Don’t Have Time live by? What is its long-term objective?
Our name – We Don’t Have Time – is our motto. We also have a manifesto on our website that basically states that climate change is an on-going catastrophe and that we need to act now. We all need to step up and come together.
The political and economic elites are clearly not taking climate change and the threat against our ecosystems seriously enough, or we wouldn’t be where we are today. We can’t trust that political leaders, government officials and financial stakeholders will do enough by themselves – the challenge is too great, the issue too important, the catastrophe too imminent. We believe that real change will only come if a movement of ordinary citizens from all over the world demands change. We must push them, ourselves, and our peers, to do much more, and faster. By building the world’s largest social media platform focused on climate change, you, me, my friends, your friends, our families, all and everyone – can be the change by the power of many.
If a large enough number of ordinary citizens come together to share information, policy proposals, solutions and demands for action, change will happen. Our platform could make that happen. Everyone – ordinary citizens, politicians, organisations and climate friendly companies could participate. We would like to involve everyone that shares our concern for the future.
The long-term objective is to acquire at least 100 million active users that can propel real change on our platform. This will be financed through a revenue flow from advertising by climate-friendly corporations that want to engage conscious customers.
What impact has We Don’t Have Time made on its cause since its creation? Is it what you expected?
We launched the tools that I mentioned by hosting the world’s first “no-fly” global, climate conference, The 2018 We Don’t Have Time Climate Conference. Experts from all over the world participated on video call and in our studio. The conference attracted a global audience of 9,000 attendees from 90 countries. We haven’t launched the platform yet, but we publish blog posts regularly and are very active on social media. Over a million people either follow us, have interacted with our action tools, have watched clips from our launch or read our blog and our newsletter.
What is the current threat that climate change poses on the world and the economy?
We are already seeing it: Extreme weather, droughts, wildfires and floods. It will get worse. Climate change is an existential threat to our civilisation and thus, by extension, to the economy. We all, including investors and business leaders, have a moral obligation to take a long-term perspective, but it’s also in our self-interest. If we don’t solve this, the future will belong to warlords, not businesspeople. If you want to run a profitable company some years from now, then you need to focus less on maximising profit for the next quarter and more on how you and your peers can be part of the change that must happen.
What would you say is the vital first step in raising awareness of climate change?
It is to realise basic scientific facts about climate change. The level of CO2 in the atmosphere, global warming and the frequency of extreme weather events are undeniable facts that all point in a very alarming direction. Then you need to analyse the connection between your current lifestyle choices and green-house gas emissions. If you are a business leader, you need to analyse the carbon footprint of your organisation. From there, you can start making choices towards reducing your emissions.
What can we do as individuals to aid in the battle against climate change?
By making conscious, informed choices, and sticking to them. The best way to influence others is to set a strong example. Don’t try everything at once, instead try to become really good at something – for instance eat more green food – and be vocal about it. Above all, be a positive role model by showing your peers that you can come a long way by choosing a green alternative, be it a vegetarian diet, train travel, or something else. Show that living green is not a sacrifice, it’s a better lifestyle!
What importance does social media have in today’s professional business world and associated activism? How do you think this has changed over the years?
I think it’s beyond doubt that social media is a real game changer. Institutions and organisations don’t have the same control over their message and the image they project. So they must be much more proactive in terms of building relations with influencers and creating innovative strategies that work in today’s media landscape. It’s much harder for corporations to gloss over irresponsible behaviour. The crowd, or actually, the market, will immediately punish them for that. With We Don’t Have Time we want to accelerate this trend with a strong focus on sustainability.
What difficulties, if any, have you run into in the process of building We Don’t Have Time from the beginning? How did you work through them?
As a tech company, we are dependent on much sought-after, and expensive, technical competence and to continuously work hard on QA. It takes time to find, educate and manage the development team. I don’t think we have had more difficulties in this area than any other start-up, but it’s the single most challenging issue that we face, especially for a fast-growing company like ours. But that sort of makes sense, because developing the platform is key to building company value.
How have your previous experiences and professional roles prepared you to run this company?
I have been an entrepreneur my entire adult life. I founded one of Sweden’s biggest financial communications firm back in 2004 and it has been a profitable company ever since. Along the way, I have founded and managed many associate companies and subsidiaries, developed communication platforms and established my old firm in its current position as a top-tier financial communications consultancy.
What has been We Don’t Have Time’s greatest achievement so far? What would you attribute this to?
We have come from nothing and gained a fantastic reach. As I mentioned, over a million people have interacted with us through social media, our blog and our action tools. What makes me proudest is that we get daily requests from people that want to help our organisation from all around the world. For me, this is proof of concept. We are already attracting ordinary citizens that are concerned about this issue. When our platform is launched, they will join it and our movement will gain momentum.
What do you anticipate in the year ahead for We Don’t Have Time and yourself?
The launch of the first version of the platform will be a huge milestone for us. We also plan to follow up on our successful conference.
Find out more at wedonthavetime.org
Thursday's plunge knocked roughly $120 billion in market value off the tech stock and is dragging the rest of the sector lower. Before Thursday, Facebook's largest single-day loss came in July 2012 when it shed 11%. The company missed projections on key metrics after struggling with data leaks and fake news scandals.
In light of recent reports, David Jones, Chief Market Strategist at Capital.com here comments on the impact of the meeting between President Trump and President Putin, and the US quarterly earnings season, on the financial markets.
At the start of the trading week, politics remains in focus for many markets. Last week saw President Trump visit the UK and today he meets with Russia's President Putin. Apparently, there is no formal agenda for the meeting but of course given both personalities involved here there is always the possibility of surprise which could have an impact on markets.
The end of last week saw a very strong finish for stock markets - in the USA the broader S&P500 index finished at its best levels in more than five months. The question now is whether there is enough momentum left to challenge the all-time high set in January of this year. There's plenty of news-flow for stock markets this week as the US quarterly earnings season continues with the likes of Netflix, Goldman Sachs, eBay and Microsoft all reporting. For the UK, the state of the High Street remains under focus with the latest retail sales due out on Thursday. The latest UK retailer under pressure is department store Debenhams with the weekend press reporting that its credit insurers were tightening terms. The share price of Debenhams has lost more than 50% of its value so far this year.
Last week was relatively quiet one for major currency markets. The pound continues to swing on various political resignations and utterings from the UK government but is broadly unchanged over the past three weeks. It's a big week for UK economic data with the latest unemployment numbers released on Tuesday and inflation on Wednesday - the CPI reading is expected to show 2.5%. It could well mean more volatility for the pound in the days ahead.
The price of oil continues to flip-flop around the $70/barrel mark. Although this has recently set three-year highs, it has been somewhat directionless in recent weeks. Perhaps there is something from today's Trump/Putin meeting that will inspire traders to pick a side and set up a more meaningful push here.
