The latest Market Talks covering Financial Services. Exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0120 GMT - Australian payments provider Tyro keeps its bull at Jefferies, where analysts lower their operating-expense forecasts for the next three fiscal years. They trim their forecast for FY 2025 by 6%, for FY 2026 by 5% and for FY 2027 by 7%, helping lift statutory Ebitda expectations for the periods by 3%, 13% and 18%, respectively. That's even taking into account a A$9 million cut to their FY 2025 revenue forecast on the expectation that a remediation payment from rival terminal provider Kounta will not repeat. Jefferies lifts its target price by 6.25% to A$1.70 and keeps a buy rating on the stock, which is up 1.9% at A$1.055. (stuart.condie@wsj.com)

2307 GMT - Goldman Sachs analyst Andrew Lyons thinks that the biggest driver of Commonwealth Bank's outperformance over the past five years is its lower implied cost of equity. GS has had a sell rating on the stock for more than five years, over which time its total shareholder return has outperformed its domestic peers by 57%. Lyons tells clients in a note that he thinks that Commonwealth's cost of equity has fallen by more than 1% more than that of its peers, to less than 7%. This accounts for about two thirds of the outperformance, he reckons. GS lifts its target price by 5.9%, to A$100.35. The stock, which has hit a series of records this year, is at A$142.96 ahead of the open. (stuart.condie@wsj.com)

1949 GMT - Gold futures and SPDR Gold shares hit new record highs, with traders piling into gold instead of interest-bearing assets as central banks cut rates. With the European Central Bank cutting its own interest rate by a quarter-point to 3.5%, investors are now looking eagerly towards next week's decision coming from the Federal Reserve. The Fed is assumed to be cutting rates next week, but by how much it cuts is being debated. "The impact of the rate cut can be seen through the rising gold price but isn't fully accounted for yet," says Joe Cavatoni with the World Gold Council. "We anticipate it to fuel upward price pressure in the coming weeks and be seen in increased demand from investors over a longer time horizon." (kirk.maltais@wsj.com; @kirkmaltais)

1435 GMT - The estimated funding level of pension plans sponsored by S&P 1500 companies remained level in August at 108% as a result of a decrease in discount rates offset by an increase in equity markets, according to consulting firm Mercer LLC. As of the end of August, the plans' estimated aggregate surplus increased by $1 billion, to $129 billion, compared with a $128 billion surplus at the end of July, Mercer says. "Signals from the Fed indicate that rate cuts are imminent, which may result in lower short-term interest rates," said Mercer partner Scott Jarboe. "However, the ultimate impact on pension plan funded status remains unclear as long-term interest rates play a more significant role." (jennifer.williams@wsj.com; @jenkayw)

1405 GMT - The share reaction to UniCredit's acquisition of a 9% stake in Commerzbank suggests the market is comfortable with the Italian bank exploring a potential takeover of its smaller German peer, Berenberg analyst Michael Christodoulou says in a note. News of the stake purchase triggered speculation about a potential deal between the two banks, with Commerzbank shares jumping 17% on Wednesday and UniCredit closing 0.2% higher. "While we believe that there is strategic merit in a potential deal, the immediate financial benefits may be modest for UniCredit. Potential risks from a cross-border deal may also diminish some of the benefit," Christodoulou says. UniCredit shares rise 1.6%, while Commerzbank falls 0.3%.(adria.calatayud@wsj.com)

1342 GMT - Europe needs stronger banks that can support each industry and the continent's economic development, UniCredit CEO Andrea Orcel says in an interview with Bloomberg TV. Italy's UniCredit on Wednesday disclosed it had a 9% stake in Germany's Commerzbank, fueling investors' expectations of a potential combination between the two banks. "We believe in Germany, we think there is space given fragmentation of the market to add further value by consolidating," Orcel says. For UniCredit, the move on Commerzbank is just partially cross-border given that it owns Germany's HypoVereinsbank, the group's CEO says. UniCredit shares rise 2.7%, while Commerzbank is up 1%. (adria.calatayud@wsj.com)

1228 GMT - CIBC Capital Markets revises its interest-rate forecast for Canada, and now envisages faster and deeper cuts to a level well below the so-called neutral rate--or a level that neither stimulates nor thwarts economic activity. The firm sticks to a quarter-point cut in October, and now expects half-point cuts in December and January, arguing this is needed to keep Canada out of a recession. CIBC's new target for the terminal rate, or when the cutting stops, is 2.25%; it was previously 2.50%. The new forecast is fueled by labor-market weakness and a potential scale back in consumption from pending mortgage resets over the next two years at sharply higher rates. (paul.vieira@wsj.com; @paulvieira)

1145 GMT - The cost of insuring European banks' credit against default using credit default swaps edges lower ahead of a widely-expected interest-rate cut by the European Central Bank at 1215 GMT which boosts appetite for risk. Future ECB rate cuts are also expected to be gradual. "Overall, a gradual descent of interest rates at a pace of 25 basis-point per quarter remains the most plausible future trajectory of [the ECB] monetary policy," UniCredit analysts say in a note. Societe Generale and UBS Group 5-year credit default swaps each decline 1bp to 52bp and 57bp respectively, S&P Global Market Intelligence data show. The iTraxx Europe senior financials index falls by three basis points to 63bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

1028 GMT - Brooks Macdonald's sale of its international business is broadly positive and will further strengthen the group's balance sheet, Peel Hunt analysts Stuart Duncan and Robert Sage say. The asset management firm's sale of the division to Canaccord Genuity Wealth for $66.3 million is a good price in their view. The final fiscal 2024 results released on Thursday were slightly ahead of Peel Hunt's and consensus expectations, they write in a research note. Additionally, against the modest increase in revenue, costs were well controlled, they add. Shares are down 2.37% at 18.50 pounds. (cristina.gallardo@wsj.com)

1022 GMT - Bitcoin could end the year at all-time highs regardless of whether Kamala Harris or Donald Trump wins November's U.S. presidential election, Standard Chartered says. Progress on relaxing regulations--particularly stringent accounting rules on banks' digital asset holdings--will continue in 2025 no matter who wins, although it would be slower under Harris, StanChart analyst Geoff Kendrick says in a note. Bitcoin could also benefit from a re-steepening U.S. Treasury yield curve--with the gap between short- and long-dated Treasury yields widening--and a seasonal rebound in bitcoin exchange-traded fund inflows in October, he says. Bitcoin could rise to $125,000 by year-end under a Trump victory, or $75,000 under Harris, he says. Bitcoin rises 2.4% to $58,043, according to CoinDesk. (renae.dyer@wsj.com)

0835 GMT - IG Group Holdings delivered strong first-quarter results, but the online trading company must work to ensure it can achieve revenue growth via a larger client base after reporting a 1% drop in active clients over the period, Barclays analysts say. The company had previously disclosed the loss of market share in some key regions, and the analysts say the decline in clients is in line with the CEO's previous comments on the need for the company to change its culture, get closer to customers and deliver products more quickly. The analysts also caution that disclosure of the fall in active clients might dampen near-term sentiment as investors could realize change could take time. Shares are up 1% at 9.70 pounds. (cristina.gallardo@wsj.com)

0823 GMT - Brooks Macdonald will be able to reinvest the proceeds of the disposal of its asset management division into businesses that better complement its refreshed long-term strategy, RBC Europe analysts Ben Bathurst and Jude Neanor say. The firm announced the sale of the unit to Canaccord Genuity Wealth for 50.85 million pounds ($66.3 million), which at a first glance seems a reasonable price, the analysts write in a research note. The company's work to reduce costs positions it well to grow its operating margin, they add. "The group's digestible market cap and strong MPS [Managed Portfolio Service] proposition mean we think it could be an M&A target for an asset manager looking to improve exposure to U.K. wealth," they conclude. Shares were down 2.4% at 18.50 pounds. (cristina.gallardo@wsj.com)

(END) Dow Jones Newswires

September 13, 2024 04:20 ET (08:20 GMT)

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