Bloomberg - Evening Briefing - Near-term threat

While the US banking sector is stable, growing vulnerabilities leave at least some institutions under a near-term threat of funding pressure and capital shortfalls, according to a post by Federal Reserve Bank of New York staff. The risks to the system are rising—albeit only modestly, they said. That’s in large part because the biggest banks are less exposed to capital shortfalls, an analysis of models through the second quarter of 2023 showed. “The March 2023 banking crisis highlighted the vulnerability of the banking sector to a sudden rise in interest rates,” the authors wrote. “Specifically, banks’ ability to limit the pass-through of rate-hiking cycles into deposit rates allows them to benefit from higher rates, but only gradually.” —Natasha Solo-Lyons and David E. Rovella

Hedge funds extended short positions on Treasuries to a record—just before smaller-than-expected US bond sales and weaker jobs data triggered a rally. “It feels like short US Treasuries positioning was at an extreme last week, which was an accident waiting to happen,” said Gareth Berry, strategist at Macquarie Group in Singapore. 

A big push by US regulators to speed up settlement times for securities trades is supposed to boost market efficiency and protect investors from potential losses. Yet for at least $1 trillion of exchange-traded funds, the oncoming overhaul to Wall Street’s plumbing threatens to drive up costs and create new operational headaches.

Goldman Sachs is revamping how its asset-management teams get rewarded, boosting their payouts when funds outperform. The changes instituted over the past several months will lift the share of profits available for investing teams directly responsible for the performance of Goldman’s alternative-investment funds.

Israel has killed more than 10,000 people in Gaza since the Israel-Hamas war erupted just under a month ago, according to health officials in the territory. US President Joe Biden discussed the possibility of “tactical pauses” in fighting during a phone call with Israeli Prime Minister Benjamin Netanyahu, the White House said. Drone and rocket attacks on US forces in Iraq and Syria since the Oct. 17 Hamas assault that killed 1,400 Israelis have injured 45 Americans, the Pentagon said. Here’s the latest on the war.

Relatives of Palestinians killed in Israeli attacks on Gaza mourned as bodies were moved from the morgue of Nasser Hospital to be buried at a cemetery in Khan Yunis on Nov. 5. Photographer: Anadolu Agency

The US currently has around 2 million more retirees than predicted, one of the most striking and enduring changes to the nation’s labor force in the aftermath of the Covid-19 pandemic. The so-called Great Retirement induced by the coronavirus is evident in the divergence between the actual number of retirees and that predicted by a Federal Reserve economic model. 

Twin brothers behind one of the world’s biggest pharmaceutical fortunes are cutting their major holding in a maker of Covid-19 vaccines as demand for the shot wanes. An investment firm for Thomas and Andreas Struengmann disclosed sales of about $110 million of BioNTech shares this year and filed last month to offload almost double that sum.

Bumble Chief Executive Officer Whitney Wolfe Herd will step down from the company she founded nearly 10 years ago. Slack CEO Lidiane Jones, who succeeded founder Stewart Butterfield earlier this year, will take over starting in January, the company said in a statement Monday. Wolfe Herd will stay on as executive chair.

Whitney Wolfe Herd Photographer: David Paul Morris/Bloomberg

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A unique wristwatch sold for a record $2.4 million at a Sotheby’s auction in Geneva, underscoring strong demand for UK independent watchmakers. The white gold Millennium model made in 2001 features the names of the late George Daniels, widely considered the greatest UK watchmaker of the modern era, and his then-apprentice Roger Smith, who now produces watches under his own name.

Roger Smith’s white gold Millennium watch Source: Bloomberg

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