Trading frenzy boosts Wall Street brokerages and banks

Good morning. On the program for the day:

• UK economic output falls unexpectedly

• SEC sues Cantor Fitzgerald

• Trumps crypto brothers

• Discoveries and disappointments of 2024 trips

We end this week by examining how Donald Trump's election victory sparked a trading frenzy on Wall Street, as expectations of sweeping policy changes fueled the U.S. stock market rally.

Trading volumes in U.S. stocks rose 38% in November compared to the same month in 2023, reaching levels not seen since the meme stock craze of early 2021, according to exchange operator Cboe Global Markets.

The boom in trading activity has benefited Wall Street banks and brokerages, favored by retail clients. JPMorgan Chase's retail banking chief said its commercial revenue for the final three months of 2024 is expected to rise more than 15 percent from a year earlier, triple the 5 percent forecast by analysts. before Trump's victory. Citigroup expects its fourth-quarter trading revenue to increase 19 percent from last year.

Meanwhile, retail broker Robinhood said stock trading volumes rose 16 percent between October and November and Interactive Brokers said its average daily revenue rose 17 percent.

There has been an incredible level of investor interest in the markets in recent months, Rick Wurster, who is to take the reins as chief executive of brokerage Charles Schwab, told the Financial Times. Here's more information on what the trading surge means for banks and brokers.

• Mergers and acquisitions: Negotiators are bracing for a comeback under Trump, but his antitrust appointments suggest a more complex reality.

Here's what we'll be watching today and this weekend:

• Nasdaq100: The technology index announces its annual reshuffling of the values ​​that compose it.

• Syria: US Secretary of State Antony Blinken meets with his Turkish counterpart in a bid to ensure a peaceful transition after the fall of the Assad regime.

• 2026 World Cup: Fifa draws lots for the 12 European qualifying groups for the football tournament which will take place in North America.

• South Korea: Parliament will hold a second vote tomorrow on a motion to impeach President Yoon Suk Yeol following his brief declaration of martial law last week.

• Georgia: The South Caucasus country is holding presidential elections tomorrow, amid a political crisis linked to EU membership and a Russian-leaning government.

How closely have you followed the news this week? Take our quiz.

Five other headline news

1. The British economy contracted unexpectedly in October. It is a blow for the Labor government which committed this summer in a manifesto to guaranteeing the highest sustained growth in the G7. The 0.1 percent contraction follows a similar decline the previous month and indicates a slow start to the fourth quarter for the UK economy. The pound sterling lost ground against the dollar after the data was released.

2. The Tokyo Metropolitan Government will allow its staff to work four days a week as authorities in the world's largest city embrace the growing four-for-three movement in a radical experiment to reverse Japan's low birth rate. Learn more about the project, which will begin in April 2025.

3. Chinese Communist Party leaders spoke of the need to make vigorous efforts to boost consumption and domestic demand. all over the place at the end of an annual economic conference. The comments highlight Beijing's desire to see the country's economy become less dependent on exports in the face of Donald Trump's threat to impose 60% tariffs on Chinese imports.

• Xi Jinping: President-elect Donald Trump invited his Chinese counterpart to his inauguration in January, an early sign of his intention to resume the high-level engagement with President Xi that marked his first term.

• War games: Further strengthening of US nuclear capabilities would have little effect on China's ability to resort to nuclear weapons in a war against Taiwan, according to the first large-scale unclassified war game of such a scenario.

4. The U.S. securities regulator has sued Cantor Fitzgerald, the brokerage firm run by Commerce Secretary nominee Donald Trump. Howard Lutnick, for allegedly making misleading statements to investors in the run-up to two public offerings that raised $750 million. Here's more on what the Securities and Exchange Commission said.

5. HSBC reviews its retail banking operations outside the UK and Hong Kong, a move that could see it significantly scale back its operations in some countries as it seeks to further reduce costs. Mexico is one of the markets under consideration, according to people familiar with the discussions. Read the full story.

Great reading of the day

Many tycoons who survived the 2022 crypto crash have joined the Maga movement and invested money in Donald Trump's re-election campaign. Philip Stafford and Nikou Asgari profile the Edisons, Wright Brothers, Carnegies and Henry Ford of modern times, as described by the president-elect this summer.

We also read…

• China's strengths: U.S. policymakers should think more about the many ways Beijing could retaliate against possible tariff increases, writes economist Stephen Roach.

• DEI poster child: The president-elect may be bad news for diversity, equity and inclusion, but his White House choices demonstrate the benefits, writes Stuart Kirk.

• The El Husseinys fall: A prominent family made its fortune working for autocrats. Who was really to blame when it all finally fell apart?

Chart of the day

The European Central Bank yesterday cut interest rates by a quarter of a point to 3 percent and reduced its forecast for euro zone growth for the next three years. The element that has changed is the downside risks, particularly the downside risks to growth, ECB President Christine Lagarde said following the decision. She warned, however, that the new forecasts did not include Donald Trump's threat to impose tariffs of up to 20% on all US imports, implying that euro zone growth could be even weaker.

Take a break from the news

From the vineyards of the Andes to the rhinos of Zimbabwe, writers including Pico Ayer and historian William Dalrymple share their 2024 travel discoveries and disappointments.