What’s Going On Here?Credit Suisse’s life is like a box of chocolates: the Swiss investment bank reported its first-quarter results on Thursday, and investors weren’t too happy with everything they got. What Does This Mean?Like its US peers before it, Credit Suisse earned more commissions last quarter than the same time last year thanks to a trading bonanza, with investors chopping and changing their portfolios in response to the economic effects of the coronavirus pandemic.
But Credit Suisse makes most of its income lending money to and managing money for companies and the uber-wealthy. And because, peculiarly, the Swiss bank follows American accounting rules, it was expected to put cash aside up front – rather than during the period a loan’s repaid – in case those borrowers fail to pay up. Between covering loans and the drop in the value of its investments, then, Credit Suisse stumped up an additional $1 billion last quarter – a figure that may still rise... Why Should I Care?For markets: Transactions speak louder than words.
Credit Suisse said its “transactional businesses” – facilitating investor trading, for example, or advising companies on fundraising – were stable this month. That shouldn’t come as much of a surprise: investors may have been encouraged to trade by oil’s recent ups and downs, while companies might’ve been raising money to survive the coronavirus-induced shutdown. It’s also news investors in other banks will probably have paid close attention to, since what’s true for one tends to be true for the rest.
The bigger picture: Another day, another record low.
Fresh survey data out on Thursday showed eurozone economic activity – in both manufacturing and services industries – fell by more than economists predicted to a record low this month. They’ll be hoping the mooted $2 trillion European recovery package will provide individual countries with extra cash so they can kickstart their respective economies once lockdown rules begin to relax. | 
