Big Banks Reflect Nation’s Lopsided Economic Recovery: Live Updates

The country’s biggest banks have all released their financial results for the past year, and the data reflects the strange economic situation facing the Biden administration. Parts of the economy are booming, others are at a standstill, and the outlook is still uncertain.

On the one hand, Wall Street’s core business is thriving:

• Goldman Sachs’s trading operation reported its highest annual revenue in a decade, a factor that helped the bank more than double its fourth-quarter profit.

• JPMorgan Chase and Morgan Stanley also reported big jumps in their investment banking and trading units after a huge year for bond issues, initial public offerings and M.&A. deals.

But other banks with big consumer-lending arms didn’t fare as well, with Bank of America, Citigroup and Wells Fargo lagging in terms of profit growth. The low interest rates that prompted companies to raise debt have hurt banks’ net interest income on consumer loans, which fell year-on-year for most lenders in their latest results.

Few bank bosses appear to think that Wall Street-focused businesses will perform as well this year, but worries about Main Street units seem less acute than last year.

In the fourth quarter, JPMorgan Chase released nearly $3 billion worth of reserves that it had built up to guard against loan defaults, while Bank of America, Citigroup and Wells Fargo released a combined $2 billion in the same period.

Over the course of the full year, those four banks still added around $50 billion to their provisions against credit losses, a sign that they remain on guard against a potential wave of defaults. In the meantime, loan demand is low and deposits are piling up.

What do banks plan to do with all that cash? “We have so much capital, we cannot use it,” Jamie Dimon of JPMorgan told investors. The bank’s cash pile has doubled over the past year, to more than $500 billion.

It’s a similar story at other banks, and now that they’ve been cleared by regulators to resume share buybacks, “we’re going to be aggressively buying back, and consistently,” said James Gorman, Morgan Stanley’s chief executive.

Analysts polled by FactSet expect the six largest banks to buy back nearly $70 billion in shares this year, up from $18 billion last year.

You know it’s bad when James Bond still can’t get out of the house.

“No Time to Die,” the 25th film in the Bond franchise, was delayed for a third time late Thursday, the surest sign yet that Hollywood does not believe the masses will be ready to return to movie theaters anytime soon. The $250 million movie will now arrive in theaters on Oct. 8, according to Metro-Goldwyn-Mayer.

It had been scheduled to debut last April. As the coronavirus continued to surge, that plan was abandoned for a November debut. Most recently, the expected blockbuster had been set for an April 2 landing.

Studios, worried about plodding vaccination efforts in the United States, were already postponing major films (again). Sony Pictures recently pushed “Morbius,” starring Jared Leto as the Marvel pseudo-vampire, to Oct. 8 from March 19. Universal and Amblin Entertainment pushed “Bios,” starring Tom Hanks on a post-apocalyptic Earth, to Aug. 13 from April 16.

But the retreat of “No Time to Die” could prompt additional dominoes to fall. It had been the first mega-film scheduled for the post-vaccine era. That honor now goes to the Marvel prequel “Black Widow” (May 7), followed by Universal’s latest “Fast & Furious” installment (May 28). The problem: Nobody is particularly eager to test the market by going first — especially not after what happened to Christopher Nolan’s “Tenet.”

Warner Bros. had tried to jump-start moviegoing in September by releasing “Tenet,” even though many theaters were still closed and others were operating at limited capacity. The film collected $363 million worldwide, a very respectable total under the circumstances, but one that disappointed Hollywood nonetheless. (Mr. Nolan’s films typically collect more than double that amount.)

More recently, “Wonder Woman 1984” has taken in an anemic $143 million worldwide, with its instant availability online in the United States undercutting ticket sales, along with fear about the resurging virus.

Loon, a prominent subsidiary of Google’s parent company, Alphabet, that aimed to use hot-air balloons to bring cellular connectivity to remote parts of the world, is shutting down.

Nearly a decade after it began the project, Alphabet said on Thursday that it pulled the plug on Loon because it did not see a way to reduce costs to create a sustainable business, reports The New York Times’s Daisuke Wakabayashi. Loon was one of the most hyped “moonshot” technology projects to emerge from Alphabet’s research lab, X.

The idea behind Loon was to bring cellular connectivity to remote parts of the world where building a traditional mobile network would be too difficult and too costly. Alphabet promoted the technology as a potentially promising way to bring internet connectivity to not just the “next billion” consumers but the “last billion.”

Google started working on Loon in 2011 and began a public test in 2013. Loon became a stand-alone subsidiary in 2018, a few years after Google became a holding company called Alphabet. In April 2019, it accepted a $125 million investment from a SoftBank unit called HAPSMobile to advance the use of “high-altitude vehicles” to deliver internet connectivity.

Last year, it announced the first commercial deployment of the technology with Telkom Kenya to provide a 4G LTE network connection to a nearly 31,000-square-mile area across central and western Kenya, including the capital, Nairobi. Before then, the balloons had been used only in emergency situations, such as after Hurricane Maria knocked out Puerto Rico’s cellular network.

However, Loon was starting to run out of money and had turned to Alphabet to keep its business solvent while it sought another investor in the project, according to a November report in The Information.

• Wall Street is expected to stumble when trading opens on Friday, following a drop in global stocks, as data showed a weakening economy in Europe because of pandemic restrictions.

• Futures tracking the S&P 500 index predicted a drop of 0.8 percent. In Europe, the benchmark Stoxx Europe 600 fell 1 percent, heading for a second consecutive weekly decline. The FTSE 100 in Britain fell 0.6 percent and the DAX in Germany dropped 0.9 percent. Most indexes in Asia also declined, with the Kospi in South Korea closing 1.3 percent lower.

• New data showed a persistent slowdown in Europe’s economies. According to the IHS Markit purchasing managers’ indexes, the British services industry suffered a steep contraction in January, while Germany’s manufacturing sector and France’s services industry also shrank more than economists’ forecast.

• Shares in Cineworld, the parent company of Regal Cinemas, the second largest movie theater chain in the United States, dropped 4.9 percent on Friday in London trading after the release date of “No Time to Die,” the 25th film in the James Bond franchise, was delayed for third time late Thursday. Shares in AMC Entertainment, the largest U.S. theater chain, dropped 2 percent in premarket trading.

• Intel shares tumbled nearly 4 percent in premarket trading after the incoming chief executive, Patrick Gelsinger, said on Thursday that the company would keep manufacturing its chips internally. He also said he wanted the company to regain its position as the “unquestioned leader in process technology.” Some analysts have suggested that Intel should spin off its manufacturing business amid stronger competition. Shares in AMD, a competitor, rose 1.3 percent.

• Shares in IBM fell 7.5 percent in premarket trading after the company said revenue dropped across all its business units, including cloud software.

• Shares in Siemens, the large German manufacturing and engineering company, rose more than 5 percent after the company reported better-than-expected earnings, aided by the economic recovery in China.