Here’s all you need to know today
1. JP Morgan posted $33.8 billion in revenue for Q2
The Q2 earnings are pouring in, starting with the big US banks. Analysts and investors are closely monitoring the results of this quarter, to quantify further impact caused by the pandemic.
JP Morgan surprised pretty much everyone though with its record $33.8 billion in revenue, and $4.69 billion in profit with its corporate and investment bank arm posting a record $5.5 billion profit.
The bank’s Wall Street division helped offset losses in two of JPMorgan’s four main businesses, its consumer and commercial bank, the firm is setting aside $8.9 billion for expected loan defaults across its operations.
JPMorgan’s retail banking division posted a $176 million loss, compared with a $4.2 billion profit a year earlier, to be expected. Its commercial bank unit also posted a $691 million loss compared to a $1 billion profit last year.
However, the bank’s earnings were saved by Dimon’s direction to grab market share in trading and investment banking is paying off and making up for the losses. The path ahead is not entirely clear, Federal stimulus programs have supported individuals and small businesses in the second quarter, masking the true impact of the pandemic, according to JP Morgan’s CFO.
The bank could be forced to cut dividends in the fall if a severe second wave triggers a recession.
2. Google is in advanced talks to invest $4 billion in India’s Jio Platforms
India’s telecommunications giant Jio Platforms has all the money it needs from high profile US investors, from Facebook to Intel and top private equity firms. Now, Google is reportedly looking to commit $4 billion into the platform.
Jio is at the center of Indian billionaire Mukesh Ambani’s ambition to transform his energy conglomerate (Reliance Industries) into a homegrown technology giant with the tech arm, Jio.
If the investment deal with Google goes through, Jio’s exposure to infrastructure, content streaming, retail and more would be even greater.
Global tech giants are looking for ways to grab a slice of India’s giant market, where Jio claims almost 400 million customers through its wireless network. Consumers are increasingly buying goods, downloading music, consuming content through cheap smartphone and Jio’s cut price data services.
The market is becoming attractive to US tech giants, particularly as they begin to move away from China.
3. UK will ban Huawei from 5G network
This is a big reversal by the UK government. UK mobile network operators will be forced to stop buying equipment from Chinese tech giant Huawei by the end of the year, according to Culture Secretary Oliver Dowden. in January, the UK gave Huawei restricted access to the country’s next-generation mobile networks.
The move would delay the UK’s 5G rollout by up to three years and cost as much as £2 billion.
So why do it at all? It would definitely anger China, and significantly delay the UK’s 5G rollout. Is this just to appease the US?
Well, sanctions were imposed on Huawei by the US, and these restrictions meant that Huawei will no longer be able to source key chip equipment from trusted American suppliers. This led to an emergency review by the UK’s National Cyber Security Center and hence, a decision was made.
“This has not been an easy decision, but it is the right one for the U.K.’s telecoms networks, for our national security and our economy both now and indeed in the long run,” said Dowden.
The decision is a significant blow to Huawei, which had been ramping up its investment into the UK. with a new research and development center in Cambridge. What else? It also puts the UK on a slower digital lane.
British telecom providers will surely not be pleased either.
4. Qantas will cut almost all international flights until March 2021
Australian airline Qantas is poised to cut almost all international flights until March 2021 as the on-going pandemic batters overseas travel. It will only maintain a few flights to New Zealand.
The airline announced in June that it was retiring its six Boeing 747 planes immediately, six months before initially planned, and slashing 20% of its staff.
In March, Qantas announced the suspension of all international flights until October, and now it appears to have been extended out to a full year.
The International Air Transport Association (IATA) forecast last month that airlines were on track to lose $84 billion this year, and another $15 billion in 2021. No airline has been spared.