Markets A.M.: Why UBS Is Aiming for Sixth Place on Wall Street

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Good morning. I'm Angus Berwick, here to catch you up for another day of pre-Christmas trading.

The push and pull over rate cuts continues this Tuesday. Investors bid up U.S. and European government bonds, bringing down yields, despite more signals from central bankers that hopes of easier policy next year may have gone too far.

In global markets, the yen swooned after the Bank of Japan stuck with negative rates . Oil prices stabilized after jumping Monday on threats to shipping through the Red Sea and and the Suez Canal. And U.S. stock futures were little changed, pointing to the major indexes holding onto recent gains.

Follow our live coverage throughout the day for the latest news affecting markets.

Meanwhile, our David Benoit and Cara Lombardo report on how UBS's modest investment-banking goal stands out in an industry known for its grand ambitions.

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Stocks to Watch

Heico $(HEI)$ : The latest quarterly results from the supplier of airplane parts beat Wall Street expectations for revenue and profit. Heico shares climbed offhours.

Nikola $(NKLA)$ : The stock climbed about 5% in premarket trading, after falling nearly 10% in the previous session. A judge sentenced the electric-truck company's founder Trevor Milton on Monday to four years in prison for defrauding investors.

UBS (UBS) , (CH:UBSG) : Activist investor Cevian Capital bought a $1.3-billion stake in the Swiss bank . UBS shares rose 2% in European trading.

Ebix $(EBIX)$ : The stock crashed nearly 68% Monday after the software services company filed for bankruptcy . Ebix shares fell another 9% in premarket trading.

FedEx $(FDX)$ : The delivery giant is set to report earnings after market close.

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Why UBS Wants to Be the No. 6 Investment Bank in the U.S. (Yes, No. 6)

By David Benoit and Cara Lombardo

More than a decade after throwing in the towel on its hopes of being a major player in the lucrative U.S. investment-banking market, UBS is making another push, but this time the Swiss financial giant's ambitions are a bit more measured.

The takeover of local rival Credit Suisse and turmoil at other global peers has opened a door of opportunity to build back up a business that has been lagging behind rivals, UBS executives say.

They have been on a hiring spree for senior deal makers, expanded research coverage and are ramping up pitches to potential clients.

But they are trying to stay realistic about how far they can climb, constrained by Chief Executive Officer Sergio Ermotti's plan to remain primarily a wealth-management firm.

Keep reading .

The Wall Street Journal's Evan Gershkovich is being wrongfully detained in Russia after he was arrested while on a reporting trip and accused of spying-a charge the Journal and the U.S. government vehemently deny. Follow the latest coverage , sign up for an email alert , and learn how you can use social media to support Evan.

Charting the Markets

The U.S. has unveiled a multinational naval force to protect merchant vessels in the Red Sea after Houthi rebel attacks threatened the Suez Canal's central role in global trade. The conflict between Israel and Hamas had, until now, barely interrupted global flows of crude and cargo.

A steady rise in shares of Costco, aided by last week's earnings report, has pulled the warehouse retailer's market cap above $300 billion for the first time .

The bond market sees no signs of recession ahead . Credit spreads, or yields on corporate bonds over similar Treasurys, are lower than average levels from recent years.

Must Reads

The San Francisco Fed president says rate cuts could be needed next year to prevent overtightening. "We're acknowledging progress when progress is there," Mary Daly said in an interview .

Checking your 401(k) is the feel-good move of the year after last week's stock-market rally. But don't let your self-worth balloon along with your net worth, financial advisers warn .

Electric-vehicle startups were flying high just a few years ago. Now they face a cash crunch, a Journal analysis finds .

More:

The Office Market Had It Hard in 2023. Next Year Looks Worse America Had 'Quiet Quitting.' In China, Young People Are 'Letting It Rot' Apple to Halt Watch Sales as It Prepares to Comply With U.S. Import Ban This Day in Markets On this day in 1927, the Dow Jones Industrial Average closed above 200 for the first time, finishing the day at 200.93. It had taken the Dow nearly 22 years to double. About Us

We want to be the first place you go to get ready for the opening bell every day. This newsletter was written by Angus Berwick (angus.berwick@wsj.com) in London.

This article is a text version of a Wall Street Journal newsletter published earlier today.

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December 19, 2023 06:26 ET (11:26 GMT)

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