Luxembourg is reportedly making progress in its efforts to stop the EU from wrestling control of investment fund supervision away from national regulators. Pictured: Luxembourg’s DP finance minister, Pierre Gramegna (centre), speaks with the European finance commissioner Pierre Moscovici (left) and French finance minister Bruno Le Maire during a Eurogroup meeting in Luxembourg, 1 October 2018. Photo credit: European Council
Morgan Stanley and Netflix shares down after earnings announcements, and the latest Brexit headlines. Delano’s breakfast briefing for Friday.
Luxembourg wins reprieve in debate over EU money manager regulation
The EU is expected to put on hold a plan that would shift supervision of investment funds from national regulators to the bloc, according to Reuters. Resistance to the plan is led by Luxembourg, backed by Cyprus, Denmark, Sweden and the UK. France, Italy and Spain are pushing the proposal. Reuters said: “Many asset managers in Luxembourg have headquarters in London and would face stricter supervision if the new rules were adopted.” Luxembourg is home to Europe’s largest, and the world’s second largest, fund industry. EU finance ministers are expected to agree to further talks when they meet on 22 January, the news agency said.
Morgan Stanley disappoints
The investment bank Morgan Stanley reported lower than expected earnings and revenue for the fourth quarter, sending its stock down 4%. Revenue was $8.6bn, well below analyst expectations of $9.3bn-$9.5bn. Earnings per share of $0.80 was lower than analyst expectations of $0.89-$0.90. Reported by the Financial Times, Investor’s Business Daily and Reuters.
Despite a big gain fourth quarter revenue (up 27% from the year prior to $4.19bn) and customers (8.8m net new subscribers), Netflix stock was down 4%. Analysts had expected even higher revenue. Reported by CNBC, the Financial Times and Reuters.
Huawei faces more restrictions
Germany has joined the UK and US in banning the Chinese telecoms supplier Huawei from providing equipment for new 5G mobile networks currently being planned, reported the Financial Times. Oxford University also banned donations and research grants from the firm, said the Guardian. Huawei said it does not provide “back doors” to Chinese intelligence agencies. China’s foreign ministry called a proposed ban on selling US chips to Huawei “hysteria”, according to DW.
Theresa May has delayed a debate on the UK’s Brexit “plan B” from Monday to 29 January, as cross-party talks are not going well, reported the Financial Times. Meanwhile, France activated its hard Brexit contingency plans, per the BBC and France 24, and Germany passed its own post-Brexit legislative package, per DW. Ireland’s central bank said “some insurance products may no longer be available to Irish consumers if there is a no-deal Brexit,” according to Independent.ie. And Bloomberg reported that British newspapers are stockpiling newsprint, ink and other supplies in case of a hard Brexit. Said one printing executive: “There are warehouses that are full to the gunwales”.
Prince Philip not injured in car crash
The Duke of Edinburgh, Queen Elizabeth’s husband, has walked away unscathed from a road accident. The 97 year old was driving near the royal family’s Sandringham estate when his Land Rover flipped on its side. Reported by the BBC, DW and Sky News.
Chinese biosphere experiment bears fruit (well, cotton)
China’s Chang’e-4 lunar lander has successfully grown the first plant on the Moon, reported Nature. A cotton seed sprouted inside a module containing air, nutrients and water. But due to the rapid drop in temperature, the plant (as expected) did not survive sundown, explained ABC News.
Last year’s neon yellow is out, says GQ. This year’s colour is electric blue.