Daily Brief - 21 Feb 2024

Barclays to return £10 billion to shareholders

Barclays is stepping up its game with a bold move to give back £10 billion to its shareholders over the next three years, as part of a fresh plan by CEO CS Venkatakrishnan to pump up the bank's revenue and shift focus away from investment banking. This marks the bank's most significant strategy refresh since 2016 and is a huge challenge for Venkatakrishnan, who took the helm in 2021. The plan includes a shake-up of the corporate structure and leadership, aiming for a more balanced and profitable future. Barclays is also setting its sights on beefing up annual revenue to £30 billion by 2026 without increasing risky investments. Amid these ambitious goals, the bank is also tightening its belt on expenses, aiming for significant savings and a leaner cost structure.

Nvidia options signal nearly $200 billion swing after Thursday’s earnings

This week, Nvidia's earnings report is causing quite the stir, with investors eyeing a potential $200 billion swing in market value. The buzz around Nvidia's stock, which has seen a threefold increase due to the AI boom, suggests a hefty 10.6% move post-earnings. Such a swing could mark one of the largest in history, second only to the dramatic shifts seen by Meta Platforms Inc. The anticipation has traders on edge, with many opting for calls over puts, hoping for another surge despite concerns over high valuations. Options trading indicates a bet on Nvidia's stock reaching new highs, with significant interest in calls that would see the stock jump by over 39%. As the earnings date looms, all eyes are on whether Nvidia will continue its meteoric rise or face a steep correction.

HSBC’s profit sinks 80% on $3 billion charge at Chinese bank

HSBC Holdings Plc saw its fourth-quarter profit plummet by 80%, taking a massive hit from a $3 billion charge related to its stake in China's Bank of Communications and a $2 billion loss from selling its French retail business. Despite these setbacks, CEO Noel Quinn remains optimistic, stressing that these issues won't affect the bank's capital or its ability to distribute dividends. HSBC, which earns most of its profit in Asia, is continuing its pivot towards this region, despite the challenges posed by China's economic slowdown and geopolitical tensions. Alongside this, the bank announced a $2 billion share buyback and maintained its dividend payouts, signaling confidence in its strategic direction and financial health.