Here are five things you need to know this morning:
New CEO coming for TD Bank
The Toronto-Dominion Bank dropped some bombshell news this morning with word that its longtime CEO Bharat Masrani will retire next April. The bank has named Raymond Chun as his successor. Chun was previously the group head of the Canadian Personal Banking unit, and he will be named COO as soon as November during the transition before ascending to the CEO and President role in April. Given the length of Masrani’s tenure at the top of the bank, in a vacuum it isn’t a shocker to see him move on after a 38-year-long career. But considering recent events at the lender, the decision will be viewed in a different light. The bank has been walloped by a money laundering probe in the U.S. that will likely cost TD billions in fines, and Masrani took full ownership for that in his announcement, noting that those challenges took place on his watch.
Markets welcome the Feds joining the rate cut party
Stock markets are poised for gains today, after the U.S. central bank served up a larger than anticipated rate cut of 50 basis points yesterday. The S&P 500 futures contract is up almost two per cent as I write this, putting the underlying benchmark to set a record high at the open. The tech-laden Nasdaq is up by even more on hopes that lending rates are set to start coming down quickly, without necessarily having to endure a recession. Gold is one of the gainers, as the precious metal briefly hit an intraday all-time high yesterday. The mini jump adds to a rally of about 25 per cent this year, as central banks around the world have been buying bullion for their reserves, while ongoing conflicts in the Middle East and Ukraine have also boosted demand since gold is a safe haven asset. Lower lending rates are also, broadly speaking, good for gold since it doesn’t pay any interest (and therefore looks more attractive as the yields on ones that do start to come down).
Bank of England stands pat for now
The Bank of England didn’t follow the Fed’s lead today, opting to hold its benchmark rate steady at five per cent. That doesn’t mean they’re in a holding pattern, however, as the central bank made it clear this morning that it plans to gradually reduce lending rates. It just didn’t see the need for a cut right now, on the heels of cutting at its previous meeting. Markets are fully pricing in another cut at the central bank for its next meeting in November. Though it was the expected move, the mini pause pushed the value of the British pound up to its highest level against the U.S. dollar since early 2022.
CPP involved in German media company Axel Springer move to split itself
German media company Axel Springer is splitting itself in two, with the controlling family keeping media assets such as Bild, Politico and Business Insider while selling off the fast-growing classified ads business. Four classified ad websites will be spun off as separate joint ventures, which will be majority controlled by private equity giant KKR, and the Canada Pension Plan Investment Board. The move will allow CPP to continue to own the fast-growing digital classified ads business while stepping away from the more controversial journalism producing unit.
EU warns Apple to open up its OS to rivals
Apple has been warned by the European Union to open up its iPhone and iPad operating systems to rival technologies, or risk significant fines. Regulators say Apple must step into line with strict new laws on making operating systems fully functional with other technology. Apple has six months to comply or face the threat of future penalties.