Wall Street's worst week since June, and a bank tax for London

A difficult week in New York

Wall Street ended Friday with its worst week since June, according to the Wall Street Journal. The paper put the damage down to new cracks in the artificial intelligence trade. Technology stocks slumped through the session, and by the afternoon in New York the Nasdaq was facing a weekly loss.

The strain had been building for days. On Thursday the Journal reported that the riskiest corner of the AI trade was crashing into higher rates. In a separate piece the same day, it described investors seeking safety in a rocky market. Moody's chief credit officer, meanwhile, told the paper that high rates have upturned how the agency looks at credit risk. Each story approached the problem from a different side, but rates sat at the centre of all of them.

CNBC took up the theme on Friday. One analysis argued that a $2 trillion deficit and 5% Treasury yields are becoming America's biggest economic challenge. A second observed that everyone expects the Federal Reserve to hold rates in October, then argued that Kevin Warsh could surprise us all. The South China Morning Post listed US inflation among five figures investors are watching.

Two smaller pieces filled out the Journal's coverage. It reported that a popular tax-saving trade is juicing Wall Street's borrowing binge.

It also ran a piece under the headline that your cheap ETF costs more than you think.

Healey's bank tax

In London the week closed on the banks. Reports that the Chancellor, John Healey, is poised to raise tax on lenders in the Budget pushed bank shares lower on Friday morning. City A.M. named Lloyds and Barclays among the fallers. Sky News reported bank shares falling as a tax on lenders is expected in the Budget.

This is Money reported that Healey has hailed the banks as a jewel in the crown of the British economy, even as he prepares the raid. The paper relayed fears that the tax will drive up business costs and mortgage rates. Its evening analysis went further. Banks make huge profits, it conceded, but the plan could backfire on customers.

Then the International Monetary Fund weighed in. According to This is Money, the Fund said the Chancellor should cut benefits instead of taxing banks.

The wider market took the news calmly. City A.M.'s live coverage had the FTSE 100 edging up as tech rebounded from a sell-off, with oil set for a weekly gain. That coverage was written early on Friday, some hours before the slump in New York. Pensions drew attention as well. City A.M. reported that savers have been refunded £188m after HMRC overtaxed withdrawals, a situation one critic called absurd. The paper also ran a piece arguing that new inheritance tax rules will drastically change how pensions are used.

Further afield

In Hong Kong, a clampdown on IPO fraud is sending shock waves across the financial sector, the South China Morning Post reported. The same paper put IPO fraud at the head of its five figures investors are watching, alongside China's export boom. A separate report it carried found Hong Kong investors the most eager in Asia to beat the markets, though tempering their hopes for returns.

On the Continent, the European Central Bank cleared UniCredit on Thursday to take control of Commerzbank, Euronews reported. LVMH, for its part, touted what it called a special bond with China, while conceding that a subdued backdrop is weighing on sales.

Trade policy surfaced in Westminster. The Guardian reported that Downing Street has left open the option of imposing tariffs on Chinese electric vehicles if the UK joins an EU scheme. Separately, the Guardian reported that Singapore is threatening to prosecute over the acrid haze drifting from fires in Indonesia, with neighbours saying clean air is not a favour.

Closer to home, City A.M. reported that the Post Office is weighing a bid for an ATM operator as part of a cashpoint expansion.

The lighter end of the day's reading ranged widely. This is Money explained why helium is becoming the hottest property for investors. Euronews asked whether Tesla's flying car could send sales and shares soaring. And the Guardian reported that rates of young people not in education, employment or training are higher in England's smaller cities and towns than in its biggest cities.