Breaking News This Morning ...
Trump triumphs: Global financial markets dropped sharply in the initial reaction to Donald Trump's unexpected victory in the U.S. presidential race. Stocks in Asia and Europe dropped sharply, bond prices fell and the Mexican peso plunged, but gold prices jumped higher. The Republicans held onto their control of both houses of Congress. Wall Street Journal, Financial Times, New York Times
Elsewhere on the President-Elect:
• Bank Investors Brace For Volatility, But Trump Victory Holds Benefits (Wall Street Journal)
• European Banks Face New Worries in Wake of Trump Victory (Wall Street Journal)
• Industrial and banking groups hit by Trump victory (Financial Times)
• Victorious Donald Trump Is the Devil Wall Street Doesn't Know (Bloomberg)
• Blame the Fed for Trump's Victory (Bloomberg)
• Wall Street Elite Stunned at Trump Triumph (Reuters)
Receiving Wide Coverage ...
Rupee recall: India unexpectedly announced that all larger-denomination banknotes would immediately cease to be legal tender in an attempt to stop counterfeiting and clamp down on the black market economy. The 500 and 1,000 rupee notes — worth around $7.50 and $15, respectively —account for 86% of all cash in circulation in India, according to the Reserve Bank of India, the country's central bank. The flash move sparked long lines at ATMs and gas stations. The government said it would introduce a series of higher value banknotes with additional security features on Thursday following a surprise bank holiday on Wednesday. It also announced restrictions on bank withdrawals. Financial Times, New York Times
Wall Street Journal
Rethinking incentives: Companies both within and outside the banking industry are rethinking how to incent their salespeople in the wake of the Wells Fargo phony accounts scandal. "While incentives such as commissions spur salespeople to close deals and sell more products, those rewards also can provoke infighting among employees and lead some to find ways around the system for their own gain," the Journal reported. "But there [are] only a few ways you can pay and reward people," noted Dan Walter, CEO of Performensation, a compensation consulting firm.
Tesco repercussions: The cyber-attack on Tesco Bank in the U.K. last weekend, in which 20,000 customers had money stolen from their accounts, "has again made clear that banks can no longer rely on sealed vaults and armed guards for their security," the Financial Times reports. The hack "is particularly troubling as money, rather than just personal details, was stolen successfully on such a large scale." Cyber security has now "shot to the top of the boardroom agenda for banks."
Subprime blues: Shares of OneMain Holdings, the biggest subprime lender in the U.S., plunged nearly 40% Tuesday after the company reported sharply lower third-quarter earnings and higher loan delinquencies. The company reported earnings per share of 19 cents, less than half analysts' estimates of 41 cents and sharply reduced its guidance for full-year profits for this year and next. It also said its percentage of loans between 30 and 89 days' delinquent rose to 2.7% from 2.4% in the second quarter and said it expected the trend to continue.
New York Times
Opening arguments: The Supreme Court heard arguments on Tuesday on whether cities can sue banks under the Fair Housing Act for predatory lending that allegedly led to home foreclosures. Miami is suing Bank of America and Wells Fargo claiming that their alleged discriminatory mortgage lending led to a disproportionate number of defaults by minority home buyers which in turn caused financial harm to the city. "The justices appeared divided over whether Miami's asserted injuries were enough to allow it to sue under the housing law," the Times commented.
"We are aggrieved in every sense of the word by the discrimination that was propounded here." Robert S. Peck, a lawyer for Miami, which is suing Bank of America and Wells Fargo for alleged predatory lending.