Shares of banks and other lenders and money managers surged as a jump in the 10-year Treasury yield to a five-month high provided a boost.
U.S. Treasury yields rose as investors returned to the theme that higher interest rates may follow the elections should the Democratic party win convincingly and pass another reflationary fiscal package. Higher longer-term yields can boost bank profits as it increases the spread they can earn on longer-term assets, such as loans, that are funded by shorter-term liabilities.
Meanwhile, a Joe Biden presidency could open the door to the first major revision in 15 years to the nation's consumer bankruptcy laws, a critical financial backstop for Americans overwhelmed by debt. Mr. Biden, the Democratic presidential candidate, has proposed changes that would make it easier for struggling borrowers to file for bankruptcy and reduce the cost of doing so, embracing Sen. Elizabeth Warren's platform for rolling back amendments to the bankruptcy code he voted for when he was a senator in 2005.
In corporate news, China called a sudden halt to the world's biggest initial public offering, casting uncertainty over the future of financial-technology giant Ant Group and delivering an extraordinary rebuke to its controlling shareholder, Jack Ma. The Shanghai Stock Exchange suspended Ant's blockbuster IPO Tuesday, a day after four regulatory agencies summoned Mr. Ma and the company's top two executives to a closed-door meeting. The meeting and a changing regulatory environment constitute major events that have disqualified Ant from listing this Thursday, the bourse said.
PayPal shares were lower despite a strong third-quarter earnings result as its explosive volume growth appears to have crested.
Europe's top markets watchdog said it found a series of problems with Germany's regulatory oversight and handling of Wirecard, the fintech darling that collapsed amid allegations of fraud. The European Securities and Markets Authority said in a report that BaFin, Germany's financial and markets supervisor, might lack independence from the German government and proper internal controls. It pointed to key staff trading Wirecard shares, including during periods when it was investigating the company.
BNP Paribas's net profit held steady in the third quarter as income from trading securities offset a decline in retail banking earnings.
A JPMorgan Chase subsidiary is facing a potential regulatory fine over internal controls, the bank disclosed late Monday. The potential fine would address historical deficiencies it has already taken steps to fix, JPMorgan said. The bank said it was in discussions with an unnamed U.S. regulator to resolve the matter.
Write to Amy Pessetto at amy.pessetto@dowjones.com
(END) Dow Jones Newswires
11-03-20 1738ET
