Bullish financials.
Wednesday’s rally amongst US banks didn’t show signs of petering out on Thursday, with most Wall Street firms buoyant on news of JP Morgan’s not-so-bad bad results.
Then there’s BlackRock. Earnings up 23 per cent. A seventh successive quarter of earnings growth. In the current markets, that’s nothing short of stellar.
Which brings us, circuitously, to Merrill, owner of 49 per cent of BlackRock, and also, quite likely, the big damper Wall Street has yet to face.
Merrill’s results aren’t due until 4pm EST. In itself, that’s unusual, since ML normally reports before market open.
Expectations are bad. Bloomberg’s analyst survey throws up a Q2 net loss of $1.91 per share. The low end of that was 93 cents. The high end, $4.21.
Citi, Oppenheimer and Wachovia analysts all put writedowns for ML in the $5bn range. Which, conveniently enough, is close to the amount ML will raise through the sale of its stake in Bloomberg, also announced today.Indeed, there’s potential for the Bloomberg stake sale – which will net a very hefty profit – to all but wipe out the damage from ML’s headline numbers. If, however, it doesn’t manage to, it could be messy.
And so from asset sales to cost cutting:
Merrill Lynch & Company, the financially ailing investment brokerage, has terminated talks with the Port Authority and the developer Larry A. Silverstein over moving its headquarters to one of the new office towers planned for ground zero.
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