Daily Brief - 15 Jan 2024

Morgan Stanley initiates job cuts in wealth division under new leadership

Morgan Stanley is set to cut several hundred jobs in its wealth management unit, affecting less than 1% of its 40,000 employees. This decision marks the first major move by new CEO Ted Pick, who took over in January. The firm aims to manage expenses better, especially after a challenging year that saw its shares drop significantly. Despite the job cuts, Morgan Stanley continues to focus on growing its wealth management business, which is a key revenue generator. However, the bank faces challenges in meeting its profit-margin goals and attracting new assets, amid potential shifts in interest rates.

Renault charges ahead with new EV models amid slowing demand

Renault is setting a positive outlook for 2024, aiming for a solid operating margin despite a dip in electric vehicle (EV) demand. The French carmaker plans to launch ten new models this year, including the much-anticipated all-electric R5, and has announced its highest dividend in five years. The company's strategy includes partnerships to cut EV costs, in response to competition and market challenges. Despite the tough market, Renault is focusing on selling more profitable vehicles and expects at least €2.5 billion in free cash flow. They're also exploring collaborations for affordable EV technology and are nearing the closure of a joint venture with China's Zhejiang Geely Holding.

Sunak in the hot seat, the Tory leadership tested in crucial by-elections

Rishi Sunak and the Conservative Party face a significant challenge in two upcoming by-elections, with Labour poised to capitalise on Tory vulnerabilities in Wellingborough and Kingswood. These elections are seen as a litmus test for Sunak's leadership and the party's appeal amid concerns over the rising influence of the Reform UK party. Labour, under Keir Starmer, aims to turn these opportunities into victories, signalling potential momentum ahead of a national vote. The elections come at a time when the Conservatives are defending large majorities but are threatened by internal dissent and the strategic moves of Reform UK. Success for Labour in these areas could intensify pressure on Sunak, while a strong showing from Reform UK may push the Tories further to the right. These electoral battles underscore the volatile political landscape in the UK, with significant implications for the forthcoming general election.