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BUSINESS Tuesday 9 July 2019
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US stocks drop on lower odds for steep Fed rate cut

By ALEX VEIGA came in its semiannual re-
Associated Press port on monetary policy.
Stocks fell in afternoon trad- Investors will be listening
ing Monday amid growing closely for any hints on the
speculation on Wall Street central bank's interest rate
that unexpectedly strong policy on Wednesday and
U.S. employment data may Thursday, when Fed Chair-
keep the Federal Reserve man Jerome Powell deliv-
from aggressively cutting ers the Fed's monetary re-
interest rates. port to Congress.
The market rallied through BIG BANK SHAKEUP: Ger-
much of June after the many's struggling Deutsche
central bank signaled that Bank tumbled 5.7% after
it's prepared to lower its it disclosed plans to cut
benchmark interest rate 18,000 jobs by 2022 as it
to offset slowing global shrinks its investment bank-
growth and the fallout from ing division. It says the
U.S. trade conflicts. move is part of a sweeping
Most investors have been restructuring aimed at re-
expecting the Fed to ap- storing consistent profitabil-
prove at least a quar- ity and improving returns to
ter-point rate cut at its its shareholders.
upcoming meeting of poli- RED FLAGS: F5 Networks
cymakers at the end of this Israel's Finance Minister Moshe Kahlon, right, meets with specialist Thomas Schreck during a visit was among the biggest
month. But a report Friday to the New York Stock Exchange trading floor, Monday, July 8, 2019. decliners in the S&P 500
showing that U.S. employ- Associated Press after an analyst at Gold-
ers added a robust 224,000 mortgages and other con- benchmark S&P 500 index whether it has decided to man Sachs downgraded
jobs in June has dimmed sumer loans. Bank of New closed at record highs three cut rates for the first time the stock, saying the pro-
Wall Street's hopes for a York Mellon slid 3.6%. days in a row last week and since the Great Recession vider of cloud computing
more aggressive half-point Traders shifted money into is about 0.7% below its all- in 2008 in the face of slow- services for mobile apps
cut. The Fed's benchmark U.S. government bonds time high set Wednesday. ing economic momentum faces risks amid weaker
rate currently stands in a and sectors seen as less KEEPING SCORE: The S&P around the world. short-term business spend-
range of 2.25% to 2.5%. risky, including real estate. 500 was down 0.5% as of Last year, Fed officials ing and rising competition.
Technology and health Macerich rose 1.3%. 1:23 p.m. Eastern time. The raised rates four times, in The stock slid 4%.
care stocks drove much Energy stocks rose along Dow Jones Industrial Aver- part to stave off the risk of HOME SWEET HOME: MDC
of the market's early slide. with the price of crude oil. age slid 124 points, or 0.5%, high inflation and in part Holdings rose 5.5% after the
Apple dropped 2.1% and Helmerich & Payne gained to 26,797. The Nasdaq to try to ensure that they homebuilder issued prelimi-
Cardinal Health slid 2.5%. 1.5%. Homebuilders were composite dropped 0.9%, would have room to cut nary second-quarter results
Communications compa- broadly higher as the yield while the Russell 2000 index rates if the economy stum- that show orders for new
nies also declined broadly. on the 10-year Treasury of smaller company stocks bled. homes jumped 32% from a
Google parent Alphabet note declined, setting the lost 0.9%. On Friday, the Fed em- year earlier.
fell 1.5% and TripAdvisor stage for lower mortgage Major stock indexes in Eu- phasized that it would act PROMISING THERAPY: San-
dropped 3.3%. rates that reduce the cost rope closed lower. as necessary to sustain the gamo Therapeutics surged
Banks fell as bond prices of a home loan. Beazer RATE CUT DOUBTS: The Fed- economic expansion, while 8.3% after the gene therapy
rose, sending yields lower. Homes USA rose 2.2%. eral Reserve will hold its noting that most Fed offi- company gave a positive
When bond yields decline Monday's slide places the next meeting of policymak- cials have lowered their ex- update on research into an
they pull down interest market on course for its ers at the end of July, after pectations for the course of experimental treatment for
rates that banks charge on second straight loss. The which the panel will reveal rates. The Fed's statement severe hemophilia A.q

Deutsche Bank cuts mark end to failed bid for global scale

By GEIR MOULSON sponse on Monday, how- the 1999 takeover of Bank-
Associated Press ever, pushing shares down ers Trust.
BERLIN (AP) — The radical 5% at 6.82 euros ($7.68) in The division helped drive
and painful restructuring of Frankfurt. strong profits in the 2000s
Germany's Deutsche Bank, CEO Christian Sewing said and was part of an ambi-
which is cutting 18,000 the job cuts have already tion to become one of the
jobs, is the end of a long, begun and will last until global banking giants, like
failed attempt to compete 2022, though he wouldn't JPMorgan or HSBC.
with the global investment give a geographical break- But the expansion, and
banking giants that left it down. the global financial crisis
overextended. Deutsche Bank had nearly around 2008, also helped
The bank plan unveiled 91,500 employees at the generate its subsequent
Sunday aims to go "back end of March, about 41,600 problems.
to our roots" by refocusing of them in Germany. Many Deutsche Bank wrestled for
on traditional strengths like of its investment banking Deutsche Bank sign on the outside of their building in London, years with high costs, weak
serving corporate custom- activities are carried out in Monday, July, 8, 2019. profits, and a low share
ers and wealthy individu- New York and London. Associated Press price. It also paid billions in
als and cutting down on its "This is a rebuilding which, in Analysts say the overhaul Deutsche Bank's move into fines and settlements relat-
stock-trading business and a way, also takes us back is the bank's long-needed investment banking dates ed to behavior before and
fixed-income investments. to our roots," Sewing said in reckoning with the failure back to 1989, when it took after the global financial
Investors gave a wary re- a message to staff. of its expansion plan. over Morgan Grenfell, and crisis. q