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Top US Banks Report Stellar Earnings for Q2 2021

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Amid the government’s spendings and stimulus, the banks also reported a strong surge in consumer spending. The credit card spending for most of the banks has shot above the pre-pandemic levels.

Amid strong earnings season this week, US banking giants are in top gear. The four-largest US consumer banks reported blockbuster results for the second quarter (Q2 2021).

Wells Fargo & Co (NYSE: WFC), JPMorgan Chase & Co (NYSE: JPM), Citigroup Inc (NYSE: C), and Bank of America Corp (NYSE: BAC) reported a combined $33 billion in net profits. Together, the banks had put $9 billion aside to absorb the losses fueled by the pandemic. Thus, the net combined profit comes to $24 billion which is still much higher than the analysts’ estimates.

  • Banking giant JPMorgan reported a net profit of $11.9 billion against $4.7 billion last year.
  • Citigroup’s profit for Q2 2021 surged to $6.19 billion from $1.06 billion last year.
  • Wells Fargo reported a $6 billion profit in the second quarter against a $3.85 billion loss last year.
  • Bank of America also clocked $8.96 billion in second-quarter profit from $3.28 billion.

The interesting thing is that consumer spending has surged further from the pre-pandemic. On the other hand, the bank noted that the credit quality has improved with savings and investments rising. The banks acknowledged the strong stimulus coming from the U.S. government. This has considerably helped to subside the feared pandemic losses.

Over and above, the national vaccination roll-out by the US government has helped more Americans join the workforce. Apart from these four big banks, banking giant Goldman Sachs reported a net profit of $5.35 billion. It is double its adjusted earnings a year back. Speaking to Reuters, Citigroup Chief Executive Officer Jane Fraser said:

“The pace of the global recovery is exceeding earlier expectations and with it, consumer and corporate confidence is rising”.

Banks Q2 2021 Earnings: Strong Pick Up in Consumer Lending

With the global recovery on track, there was a strong pick-up in consumer lending. Banking giant JPMorgan reported that the combined spending on debit and credit cards surged 22%. Also, the spending on the Citi-branded credit cards shot by a massive 40% from the last year.

For Citigroup, the card loans have dropped 4% with many customers paying off balances. Mark Mason, the chief financial officer of Citigroup said that customers might go back to their pre-pandemic habits of carrying revolving balances as of the government spending increases.

In comparison to last year, Wells Fargo also reported a 14% surge in credit-card revenue. This happened along with the surge in the point-of-sale volume. Wells Fargo chief financial officer Mike Santomassimo said:

“What we’re seeing is people starting to spend and act more in a way that seems more like it was before the pandemic started and, certainly on the consumer side, spending is up quite a bit, even when you compare it to 2018”.

The growth in loans remained tepid. However, there are clear signs of growing demand. The loan balances at Bank of America surged $5.1 billion from the last quarter. This is excluding the loans related to the US government’s pandemic aid program. “Deposit growth is strong, and loan levels have begun to grow,” said Bank of America CEO Brian Moynihan.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.



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Elon Musk, Tim Cook Deny Meeting to Discuss Tesla Acquisition

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Besides Musk, Cook has also owned up to not having met with Musk on no occasion when he appeared on the New York Times Sway Podcast.

Elon Musk, Tim Cook Deny Meeting to Discuss Tesla Acquisition

The claims published in Tim Higgins new book ‘Power Play: Tesla, Elon Musk and the Bet of the Century,’ that the Tesla Inc (NASDAQ: TSLA) CEO and Tim Cook, the Chief Executive Officer of Apple Inc (NASDAQ: AAPL) had a meeting to discuss the possible acquisition of the electric automaker has been refuted by both parties.

According to Insideevs, the conversation in which Tim Cook said ‘f*** you’ to Musk via a phone call has been adjudged as false. According to the book from Higgins, a New York Times reporter, the Apple boss called Musk to discuss a possible acquisition deal as far back as 2016. Higgins claims that both CEOs’ discussions fell apart when Musk demanded to continue being the CEO of Apple following the acquisition. The proposition was not well received by Cook who said ‘f*** you’ and hung up the phone.

While there has been a consideration to give up Tesla to Apple as Musk agreed to, that was when the former’s valuation is just about 6% of what it is today. Moreover, Musk said despite requesting to meet with Cook for the takeover consideration, the meeting never actually happened.

“Cook & I have never spoken or written to each other ever. There was a point where I requested to meet with Cook to talk about Apple buying Tesla. There were no conditions of acquisition proposed whatsoever. He refused to meet. Tesla was worth about 6% of today’s value,” Musk revealed via his official Twitter account.

Besides Musk, Cook has also owned up to not having met with Musk on no occasion when he appeared on the New York Times Sway Podcast according to an earlier Bloomberg report.

Elon Musk Says He Had No Interest Running Apple and Tim Cook

As the most valuable automaker in the world by market capitalization, there appear to be no signs that Tesla is up for sale as Musk once intended close a decade ago. Moreso, Elon Musk has said via his Twitter account that he never at any time expressed interest in taking over Apple. Per his words:

“Indeed. Both Cook & I have been clear publicly that we have never spoken or otherwise communicated. I tried to speak to him & he declined. Nor have I ever expressed any interest in running Apple to anyone. Cook is, all things considered, obviously doing an incredible job.”

The doubled-checked claim from both Cook and Musk leaves Higgins’s assertions to be questionable. Despite the book being reviewed by the Los Angeles Times, Musk duly noted that the author has “managed to make his book both false *and* boring.”

 

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.



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Li Auto Set for Secondary Listing in Hong Kong to Raise $1.93 Billion

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Chinese carmaker Li Auto set to offer secondary listing in Hong Kong as a hedge against geopolitical risks between America and China.

Automobile manufacturer Li Auto (NASDAQ: LI), is going ahead with a secondary listing on the Hong Kong Stock Exchange (HKEX) despite regulatory crackdowns in the country. The Chinese electric vehicle startup, which is already listed on the NASDAQ, is looking to raise $1.93 billion. It plans to do this by offering 100 million Class A ordinary shares to investors at 150 Hong Kong dollars or $19.29. Li Auto plans to funnel the proceeds from its share offering into research and development of technology and future models. The automobile company is also looking to scale production and increase retail activities around its products. 

Li Auto will announce a final price on August 6th amid the crackdown on Chinese listings. The recent regulatory actions have sparked a huge recent sell-off in Chinese technology stocks. The sell-off has affected everything from food delivery to ride-hailing.

The Chinese government looks to tighten its grip over Chinese technology companies in a bid to avoid a tech-led bubble bursting. This comes on the back of the US SEC imposing stricter listing requirements for Chinese-based companies in America. Amid the excitement and uncertainty of the crackdown, Chinese electric vehicle makers are also looking to capitalize.

Li Auto Is One of Many Chinese Tech Companies with Secondary Listings in Hong Kong

Several Chinese companies already listed on Wall Street have secondary listings in Hong Kong to hedge against Chinese-American tensions. In July, Xpeng (NYSE: XPEV) generated $1.8 billion in a Hong Kong listing. The Li Auto rival issued 85 million Class A ordinary shares and is also already listed in the US. Other Wall Street Chinese technology companies with secondary listings back home are Alibaba, NetEase, and JD.com. 

Owing to the increasing growth of Chinese electric vehicles, the competition has become very intense in recent times, especially among startups. Li Auto, Xpeng, and Nio are all jockeying for dominance in the playing field. In addition to this, all three companies are also directly competing with established companies such as Tesla and BYD. Even the more traditional automakers are always looking to take a sizable market share in the automobile industry. As far as the electrical startups go, Xpeng has already proven to be a force in coming years and is already being dubbed ‘The Chinese Tesla Rival’.

In July 2021, Li Auto recorded a record number of monthly vehicle sales. The company said it delivered 8,589 of its Li One vehicles, the only model in its current model lineup. The Li One is a hybrid vehicle with a fuel tank for charging the battery, giving the car an increased mile range.

Li Auto sold the highest number of vehicles among the trio of Chinese electric vehicle startups listed in the US. Xpeng delivered 8,040 vehicles which was also a company record. In comparison, Nico sold 7,931 cars in the same period.

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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.



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Wealthfront Says Clients Can Now Invest in Grayscale BTC and ETH Funds

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With the uncertainty in the current investment ecosystem, Wealthfront says it is set to offer its customers an expert-backed recommended portfolio.

Robo-adviser Wealthfront has made a bold move to offer its clients a means to gain exposure to Bitcoin (BTC) and Ethereum (ETH) through Grayscale investment funds. Per a blog post published by the firm, its expanded product offerings include the Grayscale Bitcoin Trust (OTCMKTS: GBTC) and Grayscale Ethereum Trust (OTCMKTS: ETHE). The firm noted that its clients can invest as much as 10% of their total portfolio in the trusts, citing risk and volatility as the reasons for the restrictions.

“You can add GBTC and/or ETHE to your portfolio by following the instructions here and selecting a combined allocation of up to 10% of your total portfolio. We limit your allocation to GBTC and ETHE because, as a fiduciary, we act in your best interests at all times, and these investments can be riskier and more volatile than most ETFs,” Wealthfront said in the blog post.

The maturity of the cryptocurrency ecosystem has seen a growing clamor for exposure or investments in assets like Bitcoin and Ethereum by both retail and institutional investors. Several economic fundamentals have contributed to this rising embrace of nascent assets including the pangs of inflation which has continued to contribute to the devaluation of fiat currencies like the US Dollar. More than ever, the investment community is seeing a more flexible and promising means of hedging against inflation through digital assets.

The move by Wealthfront to integrate the GBTC and ETHE is geared toward enhancing the quality of investment options by its clients. While there is no obligation on customers to invest in these offerings, their availability implies the Robo adviser is moving in line with the trends in the growing digital world.

Wealthfront Grayscale Funds: Value Added Services to Owing Crypto

The Wealthfront system uses advanced automation to take “chore out of managing your portfolio and works to maximize your after-tax returns at no extra cost.” Just like the investment manager is offering GBTC and ETHE investment options, it also gives its clients the way to acquire other investment products including ARK ETFs as well as other vehicles that represent innovative tech and social advancements.

The firm said the newly added products are complementary to the existing products as customers “can now choose from a bigger selection of ARK ETFs, pick ETFs that are specific to industries like cannabis or self-driving cars, or choose from a larger pool of socially responsible investments, adding that “the choice is yours.”

With the uncertainty in the current investment ecosystem, Wealthfront says it is set to offer its customers an expert-backed recommended portfolio. As a value-added service, the firm said its clients can bring over investments from another firm and they will handle the details that is billed to drive productivity. 

Wealthfront is arguably one of the largest Robo advisors in the world with about $25 billion in assets under management. Grayscale also holds as much as $25.5 billion in the GBTC trust and $7.47 billion in its ETHE trust.

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.



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