US FINANCIALS: Equitable Holdings 3Q25
(EQH; Baa1/A-neg/NR)
Credit neutral. EQH like other insurers is strategically shifting focus from low margin life businesses to Retirement and Asset/Wealth Management that offer more growth with less capital intensity. Results and deals this quarter reflect that, with ultimate success TBD.
- Adj NI of $455MM falls short of BBG consensus. Net loss on individual life reinsurance deal with RGA.
- Tendered for $500MM debt with RGA reinsurance proceds, Q-E Adj TD/TC 35.3%
- FY25E organic cash generation of ~$1.65B (excl RGA proceeds), with 50% from Asset Management and Wealth units. On track for 2027 target of $150MM cost savings
- Private Assets: allocating more here, target to hit $100B by 2027 across 3rd party Assets and General acct, or ~10% of total AUM. Management notes that 90% have at least 1 rating by an agency.
- Retirement: op inc $401MM down 3% YY on lower NIM, higher commission and other costs.
- Asset Management: op inc of $154MM up 38% on increased ownership in Alliance Bernstein, higher fees and margins.
- Wealth Management: op inc of $59MM up 20% on higher fees, with AUA of $118B up 16%. Stifel Independent Advisors acquisition will add $9B in client assets.
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US TSYS/OVERNIGHT REPO: ON RRP Takeup Dips, Remains Negligible
Overnight reverse repo takeup fell $3.6B Monday to $21.8B.
- That's up from the multi-year low $8.4B posted Thursday after quarter/month-end takeup reversed, but overall takeup effectively remains negligible.
- ON RRP + reserves were under $3T as of last Wednesday, potentially getting nearer to the Fed's "ample" threshold of reserves from the current "abundant" regime.
GBPUSD TECHS: Trading Below Resistance
- RES 4: 1.3789 High Jul 1 and key resistance
- RES 3: 1.3726 High Sep 17
- RES 2: 1.3661 High Sep 18
- RES 1: 1.3537 High Sep 23 and a pivot level
- PRICE: 1.3476 @ 16:27 BST Oct 6
- SUP 1: 1.3324 Low Sep 25 and the bear trigger
- SUP 2: 1.3282 Low Aug 6
- SUP 3: 1.3254 Low Aug 4
- SUP 4: 1.3144 38.2% retracement of the Jan 13 - Jul 1 bull cycle
A bear cycle in GBPUSD that began Sep 17 is intact, for now. Initial key resistance to watch is unchanged at 1.3537, the Sep 23 high and a near-term pivot level. Clearance of this hurdle would signal a potential reversal. Recent weakness resulted in a break of a trendline drawn from the Aug 1 low. Note too that 1.3333, the Sep 3 low and a key support, has been pierced. A resumption of weakness would open 1.3282 next, the Aug 6 low.
US: White House Press Conference Underway Shortly
White House Press Secretary Karoline Leavitt is shortly due to brief reporters at the White House. LIVESTREAM
- Comes as Senate Majority Leader John Thune (R-SD) prepared to hold a fifth vote this evening on the House-passed Continuing Resolution to fund the government through November 21. The bill is expected to fail again, and Thune has shown no sign of changing tack on his strategy to keep re-running the vote until Democrat Senators fold amid a pressure campaign led by White House Office of Management and Budget Director Russell Vought.
- Canadian Prime Minister Mark Carney will travel to Washington, DC, today ahead of a meeting with President Trump tomorrow. Expectations are low for any major trade breakthroughs.
- House Speaker Mike Johnson (R-LA) and National Economic Council Director Kevin Hassett both signalled in interviews on Sunday that federal worker layoffs are coming. Johnson said layoffs would be “a regrettable situation that the president does not want,” while Hassett said layoffs would start “if the president decides that the negotiations are absolutely going nowhere.”
- Trump-appointed US District Judge Karin Immergut yesterday blocked Trump’s latest attempt to deploy National Guard troops to Democrat-run cities. The ruling is the second blow in two days to Trump’s bid to send National Guard troops into Portland, Oregon.
- The Wall Street Journal notes, “Trump plans to federalize 300 members of the Illinois National Guard despite the objection of Gov. JB Pritzker [D-IL].”
