WSJ City: Profit Drops at HSBC, Investors Introducing Brexit Property Clauses

Good morning from London. Here’s essential reading today from WSJ City:

HSBC reported an 18% decline in first quarter profit, as revenue was hit by market volatility.

Overseas property investors are demanding the right to walk away from UK deals in the event of Brexit.

City Talk: UBS and Aberdeen profit slumps, BNP Paribas profit rises, Commerzbank outlook in doubt.

There has been an increase in European IPOs in recent weeks, but London is being left behind.

ECB researchers say that investors are profiting from trades on US economic data before it's released.

The pro-Europe camp is trying to mobilise the youth vote ahead of the EU referendum.

Leicester City's success in the Premier League is an inspiration to financial underdogs in Europe.

Growth in the eurozone is bucking the global trend and there could be more good news to come.

ECB President Mario Draghi has issued a strong defence of accommodative monetary policy.

Deutsche Bank's North American CEO is leaving to join boutique investment bank PJT Partners.

Another slew of earnings, UK PMIs, US payrolls and what else to watch over the coming week.

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In the Papers:

Leicester City has won the Premier League and the nation’s bookmakers will be paying out £25 million, the biggest loss in British history on a single sporting market. The Telegraph

The “bank of mum and dad” has become such an intrinsic part of the housing market that parents will be involved in a quarter of all property transactions this year. The Times (£)

Brexit will cost up to 100,000 jobs while the NHS and other public services will face significant cuts, warns Greg Hands, the chief secretary to the Treasury. The Telegraph

Britain has quietly become a star in the world of green power, with a record 25% of electricity generated last year from renewable power sources. FT (£)

Apple shares fell 0.1% on Monday for an eighth consecutive session of losses, the company’s longest losing streak since July 1998. WSJ

Burberry, reliant on wholesale agreements with large department stores in the US, faces a sticky problem: controlling its brand. WSJ

A parliamentary investigation into the collapse of BHS has accused the retailer’s former owners of “crashing it into a cliff.” The Telegraph

Liberty House plans to submit a formal bid to buy Tata Steel’s UK assets, which include the Port Talbot works employing about 4,000 people. BBC

Top ECB officials escalated a dispute with Berlin over the ECB’s easy-money policies, warning that Germany itself is partly to blame for the ultralow interest rates that are harming savers and pensioners. WSJ

What to Expect From the Markets:

London's FTSE 100 is set to open higher on Tuesday, playing catch up with global markets after the bank holiday weekend. On Monday, US stocks posted their biggest one-day advance in more than two weeks, putting the Dow and S&P within reach of their record highs.

Now that earnings season is winding down, global economic concerns are likely to determine the next direction of global markets. China private manufacturing data disappointed early Tuesday as the falling gauge of nationwide factory activity pointed to yet more weakness in the economy. The reading marks the 14th month in a row that the index has languished in contractionary territory.

In energy markets, crude-oil futures stabilised in Asia, following their biggest drop in weeks. On Monday, Brent crude tumbled 3.3%, its biggest slide in percentage terms since April 1, after data showed rising oil stockpiles in the US and increased production from the Organization of the Petroleum Exporting Countries.

Stocks to Watch: UBS profit hurt by wealth management decline; HSBC profit hit by market volatility; BNP Paribas profit up as loan provisions drop; Ferrari names Sergio Marchionne as CEO; Lufthansa 1Q after-tax loss €8m; Aberdeen Asset Management 1H pretax profit £98.8m; Aviva buys additional 23% stake In Aviva India

Coming Up: UK manufacturing PMI for April.

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