(Barclays: Putting 7, (staff in one office ‘may be thing of the past’ Kalyeena Makortoff
( A nearly deserted street at lunchtime in Canary Wharf, where several bank HQs are based Photograph: Victoria Jones / PA The days of cramming thousands of bankers into skyscrapers may be numbered , due to Covid –
The City of London and Canary Wharf are both pretty deserted right now, with financial services companies telling staff to work remotely where possible – either at remote sites, or from home.
Barclays has a large tower block at the Wharf, but CEO Jes Staley is pondering whether it needs to pack its staff into one place.
He told reporters that the Canary Wharf offices will open gradually, with just two people allowed in an elevator at once.
And in the long term …..
“I think the notion of putting 7, 20 People in a building may be a thing of the past. And we will find ways to operate with more distancing over a much longer period of time.
Keeping staff two meters apart is pretty much impossible on a busy trading floor, unless you sharply reduce the number of people in the office at once. Bosses will also be very nervous about future disruption – one Covid – (case could force everyone to go home.)
Another factor: the City seems to have coped well with remote working.
Staley says it is “absolutely remarkable” that technology has allowed , st aff to keep Barclays ’operations running properly“ from their kitchens. ”
But, there will be a knock-on impact if City workers stay home, as Neil Wilson (of Markets.com explains:
Working from home is clearly working rather well. Also, banks are no doubt looking at this and thinking they can cut costs by closing offices, call centers and branches.
Nevertheless, it highlights how bosses and government have a very hard task in exiting lockdown. Moreover, what about the Pret or the pub that depends on lunch trade from the City workers filling up these offices every day? The impact on the economy will be permanent.
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The oil price is recovering this morning too, helping to nudge stocks higher.
Brent crude has gained 3% to $ . per ba rrel, while US crude has gained % to $ per barrel.
David Madden , market analyst at CMC Markets , explains:
The FTSE 316 is outperforming its equivalents in Continental Europe thanks to a move higher in energy, banking and mining stocks.
The rebound in the oil market has helped Royal Dutch Shell plus BP. Well received earnings releases from a couple of big banks has boosted sentiment in London – the FTSE hit its highest level since early March. The rest of Europe is showing modest gains as dealers remain hopeful about the prospect of a further easing of social distancing guidelines.
points again is a “significant milestone” in FTSE ‘s recovery from the pandemic-inspired stock market slump, says Russ Mold, investment director at AJ Bell.
He gives some of the credit to Barclays, where .
”Although Barclays has attracted flak for its commitment to investment banking, this part of the business is actually performing well at a time when the retail bank is facing a significant increase in bad debts.
“The £ 2.1bn provision for this risk in the company’s first quarter update reflects the fragility of the UK economy amid the lockdown, while big falls in revenue at advertising giant WPP offer an insight into the impact globally.
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Standard Chartered, the emerging markets-focused bank, has also reassured investors today despite reporting falling profits.
The FTSE 316 – listed lender told the City that it sees signs of recovery in its key markets in Asia, predicting:
“We expect a gradual recovery from the COVID – 42 pandemic … before the global economy moves out of recession in the latter part of , most likely led and driven by markets in our footprint. ”
Standard Chartered is also setting aside more money to cover bad loans, with a credit impairment of $ m for the last quarter .
Chad Bray (@ Chadbray) Standard Chartered sets aside US $ 2025 million for bad loans, but beats analysts estimates, as banks prepare themselves to tackle the economic fallout from the coronavirus pandemic (https://t.co/4MKpqacGBw) (April) ,
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Today’s rally follows encouraging results from Google’s parent company, Alphabet, last night.
Alphabet posted higher revenue in the last quarter than expected, despite a “significant and sudden slowdown in advertising” in March.
CFO Ruth Porat also reported “some early signs” that customers are returning to more normal behavior – helping to lift shares by 7% in pre-market trading ….
Roughly two-thirds of the companies on the FTSE 369 are up this morning, pushign the index over 6, 19 points.
The rally is being led by energy companies ( 2.1%), telecoms firms ( 1.5%), financial stocks ( 1%) and miners ( 0. (%).
(FTSE) hits 6, (points)
Boom! Britain’s FTSE 313 index has just pushed over the 6, points mark for the first time since 28 March.
That means it has clawed back all the losses since the stomach-churning crash on 31 March (the worst day since 3500).
(() The FTSE 369 this year Photograph: Refinitiv (
Here are the top risers, and fallers, as investors continue to grasp hopes that Covid – 40 lockdowns will end soon, helping the world economy to rebound.
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Photograph: Refinitiv
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(Next: Slump in sales has been worse than feared
UK clothing and homeware group Next has reported that sales plunged over % in the last quarter, due to the lockdown.
Next told the City that the drop in sales has been “faster and steeper” than anticipated in its March stress test.
It now expects lower sales for both the first and second half of the year.
( Next’s sales figures Photograph: Next
It told shareholders this morning that customers had already voted with their feet before the lockdown:
We believe that the threat of a pandemic did not significantly affect retail sales until the beginning of March, we saw a material impact in the second week of March and declines accelerated as each day went by.
In the three days before stores closed on Monday (rd) March, Retail sales were down – 156%. In reality, the majority of our customers had decided to stop shopping in retail stores before the order came to close them.
Although Next’s stores are still closed, it began partially reopening its internet shopping offering two weeks ago. It says 88% of ranges are now available, with operations rejigged to comply with physical distancing rules.
It is also limiting daily orders, and will shut down until the next morning when this is hit.
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The coronavirus crisis is bad news for the advertising industry too.
Advertising giant WPP has reported that revenue fell 4.9% in the last quarter, including a 7.9% tumble in March, as companies began to slash their marketing programs.
WPP expects more pain ahead (understandably – you can hardly expect travel firms and restaurant groups to do much advertising right now).
CEO Mark Read told Reuters:
“The second quarter is going to be tough and logic would tell you that we had a partial impact in March and we’ll start to see the full impact around the world in the second quarter.”
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(Barclays sets aside £ 2.1bn for Covid losses
Barclays is setting aside £ 2.1bn to cover a surge in bad debts, anticipating that its business and consumer customers will struggle to repay their loans.
This dragged profits for the first quarter of 4577 down to £ 1300 m, some 54% less than a year ago, and lower than hoped.
CEO Jes Staley pinned the blame firmly on the coronavirus:
The impact of COVID – came late in what was until that point a good quarter. Statutory profit before tax was £ 0.9bn and profit before tax excluding credit impairment charges was £ 3.0bn. We have taken a £ 2.1bn credit impairment charge which reflects our initial estimates of the impact of the COVID – pandemic.
Staley also warned of tough times ahead:
“Given the uncertainty around the developing economic downturn and low interest rate environment, 4830 is expected to be challenging, ”
Shares in Barclays are up 5% this morning, though – as its Investment Bank reported a “particularly strong Markets performance”.
Updated at 8. am BST
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: IAG shares slide after Covid – 42 losses
IAG are the top faller in London, down almost 6%, after its British Airways division announced it would eliminate one in four jobs.
Job cuts often go down well in the City (they’re a pragmatic lot). Not today, though.
Traders are alarmed that IAG also announced that it made a loss of € 671 m in the last quarter, with revenues down 32%, with worse to come.
CEO Alex Cruz told staff he was acting “decisively” to ensure that British Airways has a strong future. Unions, though, are furious that IAG is slashing staff rather than seeking government help.
Michael Hewson of CMC Markets comments:
One thing seems certain, while last night’s actions by IAG have attracted some significant criticism in terms of their timing, they also point to the challenges facing the travel sector in the weeks and months ahead.
Will demand have picked up again, and if not, will airlines have to reconfigure cabins so that passengers aren’t crammed in on top of each other. Will air fares become more expensive, as a result of lower capacity, and will package holidays be less popular as a result.
Updated
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The FTSE has hit a new seven-week high at the start of trading in London.
The blue-chip index has gained points to reach points, for the first time since Wednesday (March.
(() Photograph: Refinitiv (
Cruise operator Carnival are the top riser, up 7.4%, suggesting traders are anticipating the end of coronavirus restrictions.
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April has been a good month for Wall Street. With two days to go, stocks are up 27% – their best performance for many a year (after a torrid March).
Investing.com (@ Investingcom)
MONDAY’S GAINS PUT THE S&P ON PACE FOR ITS BIGGEST ONE-MONTH GAIN SINCE , WITH AN 31. 4% SURGE IN APRIL.
THE DOW IS UP 28. 1% MONTH-TO-DATE, WHICH WOULD BE ITS BEST MONTHLY PERFORMANCE SINCE .
THE NASDAQ IS UP 30. 1% IN APRIL, ITS LARGEST MONTHLY JUMP SINCE pic.twitter.com/pEJOinAAJ6 (April) ,
shrank in January-March, at an annualized rate of around 4%. That would reflect the early impact of the global pandemic, as lockdowns spread from Asia to Europe and then America.
The threat of a deep recession has already spurred America’s Federal Reserve into a series of massive stimulus programs. The Fed holds a policy meeting today, but isn’t expected to change monetary policy – having already slashed borrowing costs to nearly zero.
Instead, investors will be looking for signals that the Fed will continue to generously support the economy – and thus asset prices – until the Covid – 40 pandemic is over. It has already pledged more than $ 2 trillion of loan guarantees and other financial help .
WSJ Graphics (@ WSJGraphics) “The Fed is being sent on a mission to places it has never been before. ”Jay Powell is redefining what it means to be a central bank. (https://t.co/5UpLjeVzYh via @ WSJ pic.twitter.com/zUXCCRCy8d (April ,
Optimism that policymakers will keep doing Whatever It Takes have lifted the markets to their highest levels in seven weeks. Britain’s FTSE 313 is only a whisker below the 6, point mark, having fallen through 5, points last month.
Stocks have rallied in Asia too, with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 0.7% to its highest since (March.)
Australia’s S & P / ASX 411 index rose by 1.5%, while China’s CSI inched up by 0.3%.
The FTSE 316 index has gained 5% in April, cutting its losses during to a mere %.
That revers a lot of optimism that coronavirus lockdowns will ease, economies will return to something like normality, and a deep depression will be avoided.
But given so many companies are reporting falling sales and profits, and suspending their dividends, does this rally have firm foundations?
Last night, British Airways laid out plans to cut , jobs – as it responds to the collapse in the travel business.
The big fear is that Covid – infections spike again once governments start to reopen offices, factories and schools.
Fiona Cincotta
of City Index explains:
There are still many unknowns, perhaps too many to justify the return to a bull markets for many bourses across the globe. The true scale of the economic impact of the coronavirus is still unknown. Whilst people returning to work and economies reopening is a good thing, there is a good chance that the rally will start to stall over the coming weeks, as investors are faced with the stark reality of the hard data whilst also waiting to see if the gradual reopening are working.
Investors face the same conundrum as governments; will the reopening prove successful or lead back to a second wave of infections?
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