The UK Economy Is Slowing Down After The Brexit Vote

Financial Review

Un-Zapped!

Sinclair Noe — August 10, 2016

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DOW – 37 = 18,495
SPX – 6 = 2175
NAS – 20 = 5204
10 Y – .04 = 1.51%
OIL – 1.28 = 41.49
GOLD + 5.20 = 1346.80

Job openings increased in June, and more people were hired. The Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed there were 5.62 million openings, up from 5.51 million in May, but still a bit below the all-time high of 5.84 notched in April.

There were 5.13 million people hired during the month, also an increase from the 5.05 million in May. Slightly fewer people quit voluntarily, but the 2.91 million quits in June is nearly double the levels of the worst of the recession. Quits are tracked as a measure of worker confidence in job prospects.

The federal government’s budget deficit is up 10% so far this fiscal year. The government’s shortfall for the first 10 months of the year was $514 billion, up from $466 billion in the same period a year ago.

Lower-than-expected revenues recently led the Congressional Budget Office to increase its estimate of the 2016 deficit to $590 billion, up from $534 billion. That would be about $150 billion more than last year’s deficit. Spending is up only about 2%. The problem is gross corporate receipts have dropped 12% so far this budget year.

The Bank of England revived its crisis-era bond-buying program last week as part of a package of measures to support the economy in the wake of voters’ decision to exit the European Union. It said it would buy $78 billion of British government bonds, or gilts, over the next six months, a policy known as quantitative easing. The aim is to drive down long-term interest rates and prod investors into riskier assets, making borrowing cheaper and easier for businesses and households. Just one problem – they can’t find enough bonds to buy, as yield-hungry pension funds and insurers refused offers to sell gilts to the central bank. The 10- year gilt dropped to a record low yield of 0.54%.

The UK economy is slowing down after the Brexit vote. That’s according to the latest numbers from the National Institute of Economic and Social Research, which shows growth in the UK was 0.3% in the three months up to the end of July, compared with 0.6% growth in the three months to the end of June.

Oil prices started the session moving higher but it didn’t last. The American Petroleum Institute issued a report showing a build of 2.1 million barrels of crude but it also reported a drop of 3.9 million barrels in gasoline, much larger than analysts had forecast.  Saudi production has reached 10.67 million barrels per day, up 120,000 bpd on the prior month. While it is not unusual to see Saudi production ramping up in the summer given higher demand for crude to be used for power generation, what is unusual is that production is now at a record high, above the peak seen last summer.

Also comes word that next month’s scheduled OPEC meeting in Algeria to discuss a freeze on production may be dead in the water. Oman announced it would not participate in a meeting. Finally, despite draws to both gasoline and distillates from today’s weekly EIA inventory report, builds elsewhere have lifted total U.S. crude and product inventories to a new record at over 1.39 billion barrels. This number has risen by 200 million barrels in the last 17 months. Storage tanks are filled to the brim and summer driving season is coming to a close.

One reason why the Saudis have been pumping so much oil is to try to drive US drillers in the shale fields out of business. It’s working. Chesapeake Energy agreed to give away its Barnett Shale holdings to a private-equity backed operator, exiting the birthplace of the shale revolution to escape almost $2 billion in onerous pipeline contracts. Chesapeake will convey all interests in the Barnett region in North Texas. Quitting the gas fields will slash Chesapeake’s shipping and processing costs by $715 million between now and the end of 2017 and eliminate a total of $1.9 billion in long-term pipeline agreements. Shares jumped more than 6 percent.

Brazil’s Senate voted to move the impeachment trial against suspended President Dilma Rousseff to its final phase, as expected, setting the stage for a final vote that could oust her later in August, after the end of the Olympic Games in Rio de Janeiro.

Rousseff is accused of violating budget laws by delaying payments from the government to state-controlled banks, in effect forcing the lenders to provide short-term loans to her administration. She has denied any wrongdoing. Acting President Michel Temer, who was elected as Rousseff’s vice president, would complete the more than two years remaining in her term if she is convicted.

Shake Shack shares fell more than 8% in after-hours trading as the company reported slower same-restaurant sales growth as compared with a year ago.

Hamburger chain Wendy’s reported profit and revenue figures that beat analyst expectations, but those results were offset by 0.4% same-restaurant-sales growth, which fell below the consensus. Wendy’s management blamed a focus on health and wellness is keeping some would-be customers away from fast-food restaurants. Others might be staying away because of … the presidential election.

Uncertainty surrounding the election was one reason business stumbled during the second quarter, adding to the list of areas that claim the Clinton-Trump face-off has gotten people too nervous to spend their money. Todd Penegor, chief executive officer at Wendy’s said, “[W]hen a consumer is a little uncertain around their future and really trying to figure out what this election cycle really means to them, they’re not as zapped to spend as freely as they might have been a couple of quarters ago.”

Sure that sounds like a lame excuse, but really, be honest, haven’t you felt a little “un-zapped” lately?

SolarCity’s loss widened. The company lost $0.56 a share, more than double the $0.23 loss from a year ago. Taking into account onetime adjustments, non-GAAP, SolarCity’s loss grew to $2.32, but that was ahead of the $2.44 loss that analysts were expecting. Revenue surged 81% to $185 million, easily beating the Wall Street consensus of $146 million.

SunPower, the second-largest US solar panel producer told analysts it expects to lose as much as $175 million this year, a shift from May when it expected to earn as much as $50 million. The shares plunged the most in more than seven years. SunPower said demand for utility-scale solar projects is slowing, while competition in the panel market is dragging down prices. The guidance bombshell is leaving a crater in solar shares in today’s trading.

You remember the scandal involving VW? As part of its penalties for equipping hundreds of thousands of its diesel vehicles sold in the United States with software designed to cheat tailpipe emissions tests, VW is required to invest $2 billion in clean car infrastructure, such as a network of electric car charging stations. Now, 28 Electric vehicle charging companies are calling for independent oversight; they want to make sure VW does not gain an edge in the car charging space. While the companies called the money a potential “game changer,” they worry that if it is misspent, it could hurt competition.

What’s the fastest growing devices when it comes to wireless connectivity? Is it tablets, smartphones, or computers? Wrong. It’s cars and other stuff. Internet-connected cars and other everyday products have become the fastest-growing part of the US wireless industry. AT&T dominated revenue in connected devices, with the company connecting cars to its network at twice the pace of tablets.

AT&T should reach 10 million connected car subscriptions soon. For carriers, the Internet of Things – a world in which everything from garage doors to cars to light bulbs connect to the web – has become a major source of revenue growth at a time when phone-related business has slackened. Verizon has been a distant second to AT&T in connected cars, but is mounting a big entry in a related area – connected trucks. Last week, the company agreed to buy Fleetmatics for $2.2 billion.

You know the company Alphabet?  You certainly know its subsidiary, Google? Alphabet has a market cap of $539 billion; it is one of the biggest companies in the world, bigger than some nations. It is one-year-old-today.  The restructuring was supposed to allow Google to focus on the things it knows how to do well and make money on—search, advertising, Chrome, YouTube, the Android operating system—and shifted more pie-in-the-sky projects, like trying to cure death, build robots, and beam the internet from weather balloons, into a new division called “Other Bets.”

One year later, Google is still growing—its revenue last quarter was $21.3 billion, up 21% from a year earlier—but similar signs of life have not been seen in Other Bets. In the last four quarters, it’s lost over $3.7 billion, and only generated roughly $500 million in revenue, which works out to less than 1% of Alphabet’s quarterly sales. Oh well, it’s still young.

Delta Air Lines tried to return to normal operations after a power outage hit its computer systems, causing the cancellation of more than 1,600 flights over two days. But they still had about 300 cancellations today. Most of Wednesday’s delays and cancellations are the result of flight crews being displaced or running up against maximum allowed work hours. According to Georgia Power, Delta’s problems arose after a switchgear, which helps control and switch power flows like a circuit breaker in a home, malfunctioned for reasons that were not immediately clear. In other words, the backup plan failed, and they still don’t know why.

Financial Review

CoCo Pop

Sinclair Noe — February 9, 2016

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DOW – 12 = 16,014
SPX – 1 = 1852
NAS – 14 = 4268
10 Y – .01 = 1.73%
OIL – 1.41 = 28.28
GOLD – .20 = 1189.80

Japanese stocks crashed 5.4%, making for the biggest daily drop since June 2013. The sell-off has the Nikkei hovering near a 16-month low. The weakness in stocks caused safe-haven buying of the yen, which strengthened to 114.21 per dollar, its strongest level since November 2014.

Japan also became the first G-7 country to see the yield on its 10-year debt fall below zero, finishing at a record-low -0.035%, but the Swiss 10-year note is already at negative -0.37%, and the German 10-year bund is barely positive at 0.2%.

More than $7 trillion of government bonds offered yields below zero globally as of Monday. Bond prices are indicating a hint of panic. What plunging rates tell us is that markets are expecting very weak economies and possibly deflation for years to come, if not full-blown crisis.

Today, Wall Street tried a couple of half-hearted attempts to rally or maybe to sell-off; nothing went very far. The trend is still down; the severity of the downtrend depends on where you look. The Nasdaq Composite is down 17.9% from its July 20, 2015, closing peak of 5,218.86. The drop is far worse than the descent suffered by the Standard & Poor’s 500 stock index, which is down 13% from its May peak.

The general definition of a bear market is a decline of 20% or more from a prior record peak. The Nasdaq is down 14% this year, compared to a drop of about half that for the Dow Industrials. When you’re in a bull market the Nasdaq is going to outperform to the upside. But once it starts coming under attack you’re going to see it go down a lot more than the rest of the market.

Many tech stocks have already succumbed to a bear market, including Amazon, Apple, Cisco, Netflix and Tesla. Biotech stocks are also getting crushed, with the closely-watched iShares Nasdaq Biotechnology ETF down 26% so far in 2016.

Certainly, losers are not confined to the Nasdaq; think energy and financials. KBW Bank Shares are down about 20% this year. When investors sell bank shares or bet against the banks in credit markets, it can be a signal that a period of financial turbulence has entered a new, potentially more serious phase. It suggests that banks are becoming more vulnerable to the market volatility and any underlying economic weaknesses. Some of the big US banks have been hammered: Citigroup has lost more than a quarter of its price since the start of the year, same for Bank of America.

Markets have been nervously watching Deutsche Bank bonds, with CreditSights saying the bank may struggle to pay coupons on some of its riskiest securities next year, if financial results miss expectations. Deutsche Bank shares dropped 9% yesterday; however, this morning the share price is holding steady after the bank issued a statement saying it has the cash to meet coupon payments, and may even buy back some of its own debt.

Deutsche Bank’s CEO said today the bank is “rock solid”, which sounds good but it also sounds eerily similar to pronouncements from Bear Stearns in the days before it collapsed. The problem for Deutsche is CoCo bonds, or contingent convertibles, debt that can be converted into equity in the event of nonpayment; think of it as a bail-in.  Before I sound alarmist, remember central banks have become adept at keeping megabanks on life support.

The banks have a problem, several actually. They made loans to energy companies that could result in big losses. European banks lent to other commodities players, not just energy concerns, and many were active in lending in emerging markets (Deutsche Bank, the most under-capitalized of the megabanks, is almost certainly exposed to all these trades, and its stock has been swooning accordingly).

And that’s before you get to the fact that many banks already had corporate loans they had not written down sufficiently and those books can only be getting worse given low growth and borderline deflation in Europe.

The International Energy Agency says there is even more oil coming to market than they estimated.  Supply may exceed consumption by an average of 1.75 million barrels-per-day in the first half of 2016, compared with an estimate of 1.5 million last month, and the excess could swell if OPEC members increase production. The IEA report says: “With the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term.”

In other energy news: Responding to an earlier report that has cut the share price in half, Chesapeake Energy declared it “has no plans to pursue bankruptcy,” but is looking at its restructuring options “to maximize value for all shareholders.” Meanwhile, Cheniere Energy is closing its newly formed crude oil trading desk, just two months after the company’s board fired the CEO and promised to increase its focus on core businesses.

The Labor Department’s Job Openings and Labor Turnover Summary, or JOLT, shows job openings rose 5% to 5.6 million in December, the second-highest ever recorded, behind only July 2015, when it touched 5.7 million. Hires rose to 5.36 million from 5.25 million. That shows that employers and workers are matching up. When openings are much higher than hires, it may signal workers don’t have the skills employers need.

The number of Americans leaving jobs voluntarily rose 7% to 3.1 million in December. That was the highest “quits” rate since December 2006, and it shows worker confidence in the ability to find another job is picking up. Job switching is an important source of an individual’s wage growth. In addition to firms having to compete with better wages as the labor market tightens, the bump in wages reflects the presumed productivity enhancements of better matching workers with available jobs.

Janet Yellen goes to Congress tomorrow to deliver the Fed’s semiannual monetary policy report to the House Financial Services Committee on Wednesday and Senate Banking Committee on Thursday. Yellen’s prepared testimony will be released tomorrow morning and then she will subject herself to questioning from the politicians.

Despite the Fed’s constant drumbeats for transparency, Yellen will probably not make any major announcements about monetary policy; rather, look for acknowledgment that the Fed is monitoring global economic and financial developments, and maybe a hint that the Fed is not rushing to more rate hikes.

Meanwhile the San Francisco Fed has just published research showing that an economic expansion doesn’t just die of old age. Glenn Rudebusch, director of research at the San Francisco Fed and author of the study said, “The current recovery is no more likely to end simply because it’s approaching its seventh birthday.” In other words, an 80-month old expansion has the same chance of ending as a 40-month-old expansion.

Coca-Cola reported net income of $1.23 billion, or 28 cents a share, in the fourth quarter, up from $770 million, or 17 cents a share, in the year-earlier period. The results were a penny better than estimates.

Wendy’s reported fourth-quarter profit that beat expectations as it continues to see benefits from operating fewer of its restaurants itself. The company also said it anticipates same-store sales growth around 3%, slightly above what analysts were expecting, while its earnings forecast was in-line with analyst projections.

Sears Holdings warned that its fourth-quarter revenue would fall short of expectations. Based on the disappointing performance during the holiday shopping season, Sears said it will speed up the shuttering of unprofitable stores and look to further reduce costs. The company has recently flagged 50 stores for closure in the coming months and suggested today that it may raise that number.

In other earnings news: 21st Century Fox dropped in after reporting a downbeat full-year outlook. Toymaker Hasbro reported earnings topped estimates. Yelp dropped 11% yesterday after reporting heavy spending and announcing their CFO was leaving.

Disney reported its best earnings ever. Earnings jumped to $2.88 billion, or $1.73 a share, from $2.18 billion, or $1.27 a share, in the same quarter last year. Revenue grew 14%. Top line and bottom line beat estimates. Disney dropped almost 2% in after-hours trade because they don’t have another Star Wars movie ready for release in February I suppose.

SolarCity swung to an adjusted loss of $232 million in the fourth quarter, or $2.37 a share, compared with an adjusted per-share loss $1.47 in the year-ago period. Revenue reached $115 million in the quarter, up from $72 million a year ago.

But installations in the current quarter will drop almost 80% as they close operations in Nevada. SolarCity and other residential solar installers pulled out of Nevada as utility regulators there imposed new rules that made solar less attractive in the state. SolarCity down about 25% in after-hours trade.

Viacom is adding a new phase to a fledgling partnership with Snapchat, allowing it to sell advertising on the mobile app’s behalf. Under the deal, Viacom will have exclusive third-party rights to directly sell advertising surrounding Snapchat’s owned and operated content, and will add two new channels to Snapchat Discover, the media-centric story section of the popular service.

So what happened at Chipotle’s all-employee meeting? Co-Chief Executives Steve Ells and Montgomery Moran laid out plans to improve restaurant safety, such as central processing and increased testing of ingredients, while discouraging sick workers from coming to the restaurant by offering paid sick leave.

Chipotle also said it would spend about $10M to help local suppliers adhere to the company’s new safety measures. CMG shares have lost nearly a third of their value and sales have plunged about 30% since November, following reports of E. Coli sickness and two separate norovirus outbreaks.

Fiat Chrysler fell to a 52-week low yesterday after the NHTSA released documents that suggested that some of its vehicles can roll away when a driver thinks the transmission has been set to park. The probe into three Fiat Chrysler models affects about 856,000 cars; 121 incidents have led to crashes, with 30 leading to injuries.

CBS fell short of setting a new U.S. television-watching record as its Sunday night broadcast of the 50th Super Bowl averaged 111.9M viewers. The Broncos’ win over the Panthers ranked third in U.S. TV program history, behind last year’s NBC broadcast of the game, which drew 114.4M watchers and the 2014 Super Bowl on Fox, with an audience of 112.2M. Online streams of the game through CBS and the NFL averaged 1.4M viewers per minute.

Can you name the person with the most registered patents? If you guessed Thomas Edison, you are close but no cigar. Edison registered 1,093 patents. Artur Fischer registered 1,100. The German born Fischer passed away last week at the age of 96. He invented such things as the synchronous camera flash and the drywall anchor, plus hundreds of other gadgets and gizmos.

He started as a locksmith who spent much of his time tinkering.  In 1948, he founded his own company, the Fischer Group, which today has 42 international subsidiaries, employs 4,000 people worldwide and sells its 14,000 products in more than 100 countries.

Financial Review

Honey for Bears

Sinclair Noe — February 8, 2016

Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)

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DOW – 177 = 16,027
SPX – 26 = 1853
NAS – 79 = 4283
10 Y – .11 = 1.74%
OIL – .80 = 30.09
GOLD + 15.50 = 1190.00

This was just an ugly session from the start. The Dow opened about 200 points down and then trickled lower; at one point down more than 300 points. The S&P 500 index broke down through the key level of support at 1860 that I warned you about in January and again last week, taking out the August 2015 lows and the October 2014 lows.

The S&P 500 not only took out support from January, but now we look to minor support at 1815, and then, well there isn’t really any support. In other words, the charts look very dangerous here.

And if you prefer fundamentals over technicals; this is what FactSet had to say in its recent report: “For Q4 2015, the blended earnings decline is -3.8%. If the index reports a decline in earnings for Q4, it will mark the first time the index has seen three consecutive quarters of year-over-year declines in earnings since Q1 2009 through Q3 2009.”

The difference this time versus 2009 is that valuations are much higher. FactSet data show expectations for first-quarter per-share earnings have collapsed to a decline of 5.5% as of today. Back in September, that forecast was for growth of 4.8%. By the end of December, it had fallen to growth of just 0.8%.

Chinese stock markets are closed for trade all week to celebrate the Lunar New Year, providing little direction for European stocks at the open. However, data out over the weekend showed China’s foreign-exchange reserves fell to the lowest level in more than three years last month, in another sign of capital flight as the yuan weakens.

European stocks opened lower, extending last week’s losses. The Stoxx Europe 600 index had its lowest close in more than 15 months; banks in the Stoxx Europe 600 Index have dropped about 39 percent since a peak in July. Their slump this year is the worst of any other industry group.

Oil prices kicked off the week in the red. Data on oil demand in the world’s two largest markets, the U.S. and China, has taken a sharp turn lower. U.S. demand for oil products in January fell 3.9% compared with January 2015. In China, although overall oil demand was flat in December and an improvement on November’s outright decline, it still represented the second weakest reading for the year.

Meanwhile, hopes about an agreement between producers within and outside of the Organization of the Petroleum Exporting Countries to cut output and support prices have also faded in recent days. A meeting between Saudi Arabia and Venezuela on Sunday ended without any plans for a production cut. Iran plans to sell 300,000 barrels of crude oil a day to European customers now that Western sanctions are lifted. And within the next few months, Iran wants to ramp up production to 500,000 barrels a day, with the remainder going to Asia.

Chesapeake Energy, the natural gas driller that’s been cutting jobs and investor payouts to conserve dwindling cash flows, lost more than half it stock market value today after a report that it hired a restructuring law firm. The company’s bonds led losses among high-yield debt. Chesapeake’s notes due March 2016 (about $500 million in bonds) tumbled to a record to 74.5 cents, from 95 cents last week, while its bonds maturing in 2017 fell to an all-time low at 34 cents.

Exchange-traded funds that hold US junk bonds slid to their lowest levels in almost seven years. BlackRock’s iShares iBoxx High Yield Corporate Bond exchange-traded fund and SPDR Barclays High Yield Bond ETF both fell to the lowest levels since 2009. In high yield, energy, communications and health care fared the worst. Banks and insurers in Europe led a surge in the cost of insuring corporate bonds to the highest levels since 2013.

European financial firms are taking a beating amid fears of “a chronic profitability crisis that makes it impossible for banks to build up barely-adequate capital bases. None of the fresh wave of selling stems from new news, but the list of negatives is long. Fears surrounding non-performing loans and other deep-rooted issues in the Italian banking sector have driven nerves, while a slew of weak earnings from large banks such as Credit Suisse and Deutsche Bank have added to concerns. The worst of the lot is Deutsche Bank, Germany’s biggest, down about 10% today, and down 40% year-to-date, as its credit default swaps spiked to their highest levels since 2012.

Bank credit default swaps, or contracts that offer protection against the risk of a bond defaulting, have also surged in price, indicating intensifying fears for financial groups’ credit. Deutsche bank’s 5-year senior CDS has jumped 11bps today to a three-and-a-half-year high of 212bps, up from 134bps just over a week ago. The cost of protecting the company’s subordinated debt from default for five years using credit-default swaps has more than doubled since the end of 2015, rising to 438 basis points, a four-year high, from 187. That is just a very, very big selloff.

And what makes it crazier still, is that it looks like Deutsche Bank has more than sufficient reserves set aside for its debt and the interest on its debt, exclusive of operating results. But for now that doesn’t matter; share price has dropped, which increases expectations for more turmoil, which pushes the cost of hedging, which frightens shareholders, who then sell, pushing prices even lower. If it all sounds a bit over-done, it is, but it still demands we pay attention.

And the situation is not unique to Deutsche Bank, which is just one of the extreme examples. Basically all the banks are seeing their credit default swaps trading at the highs of the year. And here in the US, the large cap financials are down almost 12% year-to-date. That means there has been some panic selling. Today, the mega-banks, including Bank of America, Citi, and Wells Fargo all moved to new lows intraday or at the close.

The KBW Bank Index, which consists of 24 banks, is approaching 2008 and 2011 lows relative to the S&P 500. So, the question of the day is: Are the large cap financials cheap or is the rest of the market still overpriced? We may need more time to answer that one, but for now the big banks distress is honey for the bears.

If Congress does not act soon, Puerto Rican officials say major defaults are likely this spring. They are trying to make their case for a law that would allow a broad restructuring of the territory’s multibillion-dollar debt. The officials also said they knew that any legislative help would come at a stiff price: Puerto Rico would have to submit to a federal control board, something viewed by some on the island as colonialist-style interference.

Argentina has offered to pay about $6.5 billion in cash to U.S. holdouts that refused debt restructurings after its 2001 default, implying a haircut of about 25% on the amount bondholders say they are owed. If accepted by all the holdouts, which are led by billionaire Paul Singer’s Elliott Management, the deal would clear the way for Argentina’s return to the international capital markets.

Washington is vowing to ensure the United Nations Security Council imposes serious consequences on North Korea after it launched a space rocket in a purported satellite program widely considered to be a cover for developing ICBMs. The latest launch, which follows North Korea’s Jan. 6 nuclear test, may kick off a rapid buildup of American missile defenses in Asia.

Apollo Education Group, the parent company of the University of Phoenix, will be taken private as it is acquired by a group of investors for $1.1 billion. The investors will pay $9.50 in cash per share, which is 30% above the company’s trailing 30-day volume weighted average stock price. Tony Miller, chief executive of The Vistria Group, one of the investors, will become chairman of the board for the Apollo Education Group once the transaction is completed. The other investors included Apollo Global Management, LLC and Najafi Companies.

The agreement arrives weeks after the company reported a decline in revenue and another round of layoffs at the for-profit college. Phoenix, like other for-profit schools, has been battered by poor enrollment, government investigations and heightened federal regulation.

Chipotle closed its more than 2,000 restaurants today for a few hours to address employees about the food-borne illnesses that have led to lawsuits and a federal investigation. Chipotle used the event to review new food safety protocols and explain the steps the company is taking to improve food safety.

Ford is planning to build a new assembly plant in Mexico to sharply increase output from the country, representing the latest shift of investment abroad by a Detroit automaker following the signing of a costly new labor deal. Ford expects to add 500,000 units of annual Mexican capacity starting in 2018 (more than double what it built in 2015), by constructing a new assembly complex in San Luis Potosí and expanding an existing factory near Mexico City.

You don’t see this every day…Credit Suisse CEO Tidjane Thiam has asked the company’s board to reduce his bonus, days after the Swiss bank reported a fourth-quarter multibillion-dollar loss that sent its share price tumbling. Thiam, who joined the bank in July, did not indicate the size of the cutback, but said his was the largest bonus reduction within the management team.