Goldman details $5 billion revenue growth plan amid investor questions

(Reuters) - Goldman Sachs Group Inc on Tuesday unveiled a growth plan that could add as much as $5 billion in revenue annually, as the bank seeks to reassure investors after two poor trading quarters in a row.

The growth initiative, which is not dependent on an overall improvement in the market environment, can be realized in the next three years and could contribute up to $2.5 billion in pre-tax earnings, Goldman president Harvey Schwartz said during a Barclays Group PLC financials conference in New York.

The plans represent a marked shift for a firm that historically has given its shareholders little information about how it makes its money.

But investor frustration particularly around the firm’s fixed income trading performance has tested Goldman’s time-tested “black box” strategy, Reuters reported in August.

“These are things that generally might give you a sense of what’s happening under the hood at Goldman Sachs,” Schwartz said.Schwartz devoted significant time detailing growth priorities within fixed income, which during the second quarter reported a 40 percent drop in revenue. These opportunities include courting a greater number of asset managers and banks to trade with the firm; expanding its footprint with corporate clients particularly in commodities and currencies; lending more to clients; and hiring more trading talent. These plans could add $1 billion in revenue to Goldman each year, Schwartz said.

Goldman had said it was trying to reduce its reliance on hedge fund clients and to encourage bankers and traders to work together to boost profit with the trading division.

Goldman also is focused on growing its lending portfolio across the firm, including its Marcus consumer loan and deposit platform, its corporate clients and its private wealth management clients.

Some analysts expressed hesitation that Goldman will be able to execute on these plans.

“Goldman’s growth strategy is focused on penetrating new markets or client segments outside of the company’s traditional strengths so we are somewhat skeptical of the management’s ability to hit these revenue targets,” KBW analyst Brian Kleinhanzl wrote in a note.

Reporting by Olivia Oran in New York; Editing by Chizu Nomiyama and Bill Trott

Our Standards:The Thomson Reuters Trust Principles.

Goldman details billion revenue growth plan amid investor questions
Goldman details billion revenue growth plan amid investor questions
http://feeds.reuters.com/news/wealth
$inline_image !!! CLICK HERE TO READ MORE !!! Goldman details $5 billion revenue growth plan amid investor questions Forex Blog | Free Forex Tips | Forex News http://www.forextutor.net/goldman-details-5-billion-revenue-growth-plan-amid-investor-questions-2/

Goldman details $5 billion revenue growth plan amid investor questions

(Reuters) - Goldman Sachs Group Inc on Tuesday unveiled a growth plan that could add as much as $5 billion in revenue annually, as the bank seeks to reassure investors after two poor trading quarters in a row.

The growth initiative, which is not dependent on an overall improvement in the market environment, can be realized in the next three years and could contribute up to $2.5 billion in pre-tax earnings, Goldman president Harvey Schwartz said during a Barclays Group PLC financials conference in New York.

The plans represent a marked shift for a firm that historically has given its shareholders little information about how it makes its money.

But investor frustration particularly around the firm’s fixed income trading performance has tested Goldman’s time-tested “black box” strategy, Reuters reported in August.

“These are things that generally might give you a sense of what’s happening under the hood at Goldman Sachs,” Schwartz said.Schwartz devoted significant time detailing growth priorities within fixed income, which during the second quarter reported a 40 percent drop in revenue. These opportunities include courting a greater number of asset managers and banks to trade with the firm; expanding its footprint with corporate clients particularly in commodities and currencies; lending more to clients; and hiring more trading talent. These plans could add $1 billion in revenue to Goldman each year, Schwartz said.

Goldman had said it was trying to reduce its reliance on hedge fund clients and to encourage bankers and traders to work together to boost profit with the trading division.

Goldman also is focused on growing its lending portfolio across the firm, including its Marcus consumer loan and deposit platform, its corporate clients and its private wealth management clients.

Some analysts expressed hesitation that Goldman will be able to execute on these plans.

“Goldman’s growth strategy is focused on penetrating new markets or client segments outside of the company’s traditional strengths so we are somewhat skeptical of the management’s ability to hit these revenue targets,” KBW analyst Brian Kleinhanzl wrote in a note.

Reporting by Olivia Oran in New York; Editing by Chizu Nomiyama and Bill Trott

Our Standards:The Thomson Reuters Trust Principles.

Goldman details billion revenue growth plan amid investor questions
Goldman details billion revenue growth plan amid investor questions
http://feeds.reuters.com/news/wealth
$inline_image !!! CLICK HERE TO READ MORE !!! Goldman details $5 billion revenue growth plan amid investor questions Forex Blog | Free Forex Tips | Forex News http://www.forextutor.net/goldman-details-5-billion-revenue-growth-plan-amid-investor-questions/

Marcato's McGuire sees Terex's share price more than tripling

NEW YORK (Reuters) - Hedge fund manager Mick McGuire on Tuesday said that crane maker Terex Corp’s share price could more than triple as the company focuses on its core business and pursues a disciplined capital allocation plan.

McGuire’s Marcato Capital Management announced in July 2016 that it had bought a stake in Terex. One of McGuire’s partners was added to the company’s board earlier this year. Terex is Marcato’s largest investment, with a current stake of roughly 6 percent, McGuire said.

McGuire praised Terex’s chief executive officer, John Garrison, who was relatively new when the hedge fund first invested. “This is the kind of CEO that you want to encounter as an activist,” McGuire said at the CNBC Institutional Investor Delivering Alpha Conference.

Terex’s share price closed up 4.19 percent at $41.73 on Tuesday, ahead of McGuire’s presentation. McGuire said the company’s share price has doubled since his fund invested.

“We are most excited about the sourcing savings that Terex is pursuing,” McGuire said.

He also voiced enthusiasm about the company’s ongoing plan to repurchase shares. Terex has already repurchased $700 million worth of shares and has authorized the repurchase of up to another $225 million.

“I like this one a lot,” McGuire said.

Reporting by Svea Herbst-Bayliss and Lawrence Delevingne; Editing by Leslie Adler

Our Standards:The Thomson Reuters Trust Principles.

Marcato"s McGuire sees Terex"s share price more than tripling
Marcato"s McGuire sees Terex"s share price more than tripling
http://feeds.reuters.com/news/wealth
$inline_image !!! CLICK HERE TO READ MORE !!! Marcato"s McGuire sees Terex"s share price more than tripling Forex Blog | Free Forex Tips | Forex News http://www.forextutor.net/marcatos-mcguire-sees-terexs-share-price-more-than-tripling-2/

Marcato's McGuire sees Terex's share price more than tripling

NEW YORK (Reuters) - Hedge fund manager Mick McGuire on Tuesday said that crane maker Terex Corp’s share price could more than triple as the company focuses on its core business and pursues a disciplined capital allocation plan.

McGuire’s Marcato Capital Management announced in July 2016 that it had bought a stake in Terex. One of McGuire’s partners was added to the company’s board earlier this year. Terex is Marcato’s largest investment, with a current stake of roughly 6 percent, McGuire said.

McGuire praised Terex’s chief executive officer, John Garrison, who was relatively new when the hedge fund first invested. “This is the kind of CEO that you want to encounter as an activist,” McGuire said at the CNBC Institutional Investor Delivering Alpha Conference.

Terex’s share price closed up 4.19 percent at $41.73 on Tuesday, ahead of McGuire’s presentation. McGuire said the company’s share price has doubled since his fund invested.

“We are most excited about the sourcing savings that Terex is pursuing,” McGuire said.

He also voiced enthusiasm about the company’s ongoing plan to repurchase shares. Terex has already repurchased $700 million worth of shares and has authorized the repurchase of up to another $225 million.

“I like this one a lot,” McGuire said.

Reporting by Svea Herbst-Bayliss and Lawrence Delevingne; Editing by Leslie Adler

Our Standards:The Thomson Reuters Trust Principles.

Marcato"s McGuire sees Terex"s share price more than tripling
Marcato"s McGuire sees Terex"s share price more than tripling
http://feeds.reuters.com/news/wealth
$inline_image !!! CLICK HERE TO READ MORE !!! Marcato"s McGuire sees Terex"s share price more than tripling Forex Blog | Free Forex Tips | Forex News http://www.forextutor.net/marcatos-mcguire-sees-terexs-share-price-more-than-tripling/

Gundlach: Equity investors to see change in dynamic with QE reversal

NEW YORK (Reuters) - Investors in equities and risk assets should brace themselves for the end of quantitative easing, given the high correlation it has to high stock and junk bond prices, Jeffrey Gundlach, chief executive at DoubleLine Capital, warned Tuesday.

Equity and risk-asset investors are “unfortunately about to see the first change in dynamic in years” with the end of QE, Gundlach said on a webcast.

In September, the Federal Reserve is expected to begin to reverse quantitative easing, QE. Interest payments and principal from maturing securities will no longer be reinvested in the bond market. This is known colloquially as “balance sheet reduction,” because as the bonds and mortgage-backed securities mature, the asset side of the Fed’s balance sheet will shrink.

“You go into a cumulative ... quantitative tightening. So I‘m wondering if this suggests a little more trouble in 2018,” Gundlach said about the reversal of QE.

“I am thinking that maybe we have to start going on ‘Trouble Watch’ for the middle part, perhaps, of 2018 with quantitative easing scheduled to go away.”

Gundlach, known on Wall Street as the Bond King, noted that the percentage of the S&P 500 components that are above their 200-day moving average “are really weak.”

“Generally, when you start to see weakness on the percentage of the 200-day, it’s foreshadowing potential trouble on the index broadly. Not really that scary yet but these are one of the things that we have to watch,” said Gundlach, who oversees more than $109 billion, as of June 30, at DoubleLine.

On the dollar, Gundlach said he thinks a short-term bottom has been made in the greenback and a rally is overdue, but the currency ”does not trade well.

“I am really not that fond of emerging markets in the short term because I don’t think the dollar is going to keep falling, but I do like EM a lot on a long-term basis,” Gundlach said.

Gundlach remarked on Bitcoin in the wake of JPMorgan Chase & Co CEO Jamie Dimon’s comments Tuesday at an investor conference, calling it a “fraud” that will “blow up.”

Gundlach said on August 25 he received an email from his 86-year-old mother with a link to a story that recommended buying Bitcoin. ”I philosophically don’t believe that it’s unhackable...I’ve had a lot of really smart 20-somethings argue with me on this that it really is completely safe.

“Obviously I am an investor and not a speculator. I have no interest speculating on a Bitcoin type of deal,” Gundlach said. “I am going to let this mania go on without me.”

Reporting By Jennifer Ablan; Editing by Cynthia Osterman and Diane Craft

Our Standards:The Thomson Reuters Trust Principles.

Gundlach: Equity investors to see change in dynamic with QE reversal
Gundlach: Equity investors to see change in dynamic with QE reversal
http://feeds.reuters.com/news/wealth
$inline_image !!! CLICK HERE TO READ MORE !!! Gundlach: Equity investors to see change in dynamic with QE reversal Forex Blog | Free Forex Tips | Forex News http://www.forextutor.net/gundlach-equity-investors-to-see-change-in-dynamic-with-qe-reversal/

Some U.S. banks already comply with new class action, arbitration rule

WASHINGTON (Reuters) - Senator Elizabeth Warren, who opposes efforts to dismantle a new rule allowing customers to sue financial companies in class actions, released letters on Tuesday from U.S. bank CEOs in which they declined to defend lobbying against the measure and several said they already comply with it.

Warren asked the bank CEOs if they believed the rule should be reversed.

“Despite the claims of their paid lobbyists, not a single one of the 16 CEOs I wrote was willing to defend efforts to gut the (Consumer Financial Protection Bureau‘s) pro-consumer arbitration rule,” she said in a statement.

The letters to liberal Warren showed Capital One , Bank of America, Ally Financial, T.D. Bank and HSBC North America rarely use mandatory arbitration clauses, where customer must give up the right to sue and agree to take possible future disputes to closed-door mediation as a condition of opening accounts.

American Express, Citi, JPMorgan Chase & Co, PNC and SunTrust give new customers the opportunity to opt out of the clauses within a limited timeframe, the letters show.

The rule, finalized by the CFPB in July, does not end arbitration. Instead, it says customers cannot be forced to only use arbitration in settling disputes. The practice has spread like wildfire across industries following the Supreme Court 2011’s decision that the clauses are legal.

The banking industry says the rule, effective next year, will drive up costs with time-consuming class actions. It also says arbitration is more effective in delivering restitution to individuals. A CFPB study found customers receive higher awards through arbitration than lawsuits on average but noted fewer arbitration cases lead to awards.

Saying the rule only benefits trial attorneys, Republicans in the House of Representatives swiftly voted to kill it. The Senate, where Democrats and some conservatives say the rule restores customers’ constitutional rights to due process, has been slower to act. Under the Congressional Review Act, both chambers must approve a repeal resolution to kill the rule.

Democrats also say arbitrations are rigged against customers because they are handled out of the public eye and arbitrators are often paid by companies.

Mandatory arbitration clauses have grabbed the spotlight over the last year, after they blocked customers from suing Wells Fargo & Co in the phony account scandal. Equifax Inc included arbitration clauses when it offered credit monitoring to victims of its recent hack, but then removed them under public pressure.

Reporting by Lisa Lambert; Editing by Cynthia Osterman

Our Standards:The Thomson Reuters Trust Principles.

Some U.S. banks already comply with new class action, arbitration rule
Some U.S. banks already comply with new class action, arbitration rule
http://feeds.reuters.com/news/wealth
$inline_image !!! CLICK HERE TO READ MORE !!! Some U.S. banks already comply with new class action, arbitration rule Forex Blog | Free Forex Tips | Forex News http://www.forextutor.net/some-u-s-banks-already-comply-with-new-class-action-arbitration-rule/