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Morning Coffee: Trump’s early Christmas present for traders. How to quit consulting for hedge funds

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At what point will large investment banks actually start to hire for their fixed income currencies and commodities teams again? After all, a solid Q3 was largely characterised by boasts about how banks got by with fewer people.

Now, it looks like Q4 is going to be another hum-dinger. Specifically, J.P. Morgan CEO Jamie Dimon said at a conference yesterday that he expects a 15% uplift in trading revenues compared to Q4 last year, and Bank of America chief Brian Moynihan said a similar gain is likely for its fixed income division.

If Q3 was all about the Brexit bump, the WSJ suggests that the Q4 surge is down to Trump – his election has sent stocks soaring and increased volumes hugely in fixed income because of the expected interest rate hike. It also helps that U.S. investment banks are gaining market share from European rivals, said Dimon.

However, Dimon’s comments about how J.P. Morgan’s electronic trading business was “absolutely critical” in fixed income signals that most banks are investing in technology rather than hiring more traders.

As fixed income becomes more electronic, expect few sales and trading jobs in FICC. Marty Chavez, CIO of Goldman Sachs, said recently that the banks’ equities trading floor went from 400 to four sales traders who broke stocks over the phone as computers took over. Banks just don’t need the same volume of people in fixed income. 1,500 people departed FICC desks, even in the third quarter, according to data from research firm Coalition.

Separately, if you want a lesson in how to escape consulting without actually leaving the skills behind, listen to Doug Haynes – Steve Cohen’s right-hand man at Point72 Asset Management.

Haynes said that there’s a natural point when you have to leave consulting, or get stuck. “Once you pass a certain tenure, it doesn’t make sense to leave the profession, you don’t have enough runway left to go do something else and build that new set of skills.”

Haynes said that he was “very happy” at taking the decision to retire from Mckinsey, just before Steve Cohen approached him to “put together a McKinsey team” as he restructured Point72.

“I said that is a great idea. It would be an even better idea if I hadn’t retired six weeks ago,” he replied. In the end, Haynes joined as an ‘adviser’ and is now president of Point72.

Meanwhile:

The City threatening the UK over Brexit won’t work (BreakingViews)

5,000 desks at Barclays’ Canary Wharf HQ are being sub-let to the UK government (Bloomberg)

“$15 an hour, as any investment banker will tell you, is not going to make anyone rich” (Charlotte Observer)

Houlihan Lokey has just made a big hire from Deutsche Bank (Reuters)

Standard Chartered is likely to move to Dublin or Frankfurt because of Brexit, but just 25-30 staff will go (Telegraph)

“There was quite a blunt warning that politically the Government does not want to be seen to do a deal to favour rich bankers.” (Telegraph)

In an arid IPO environment, investment banks are aggressively pursuing block trades (WSJ)

Coding bootcamps are not a fast-track to a new career: “These tech bootcamps are a freaking joke. My clients are looking for a solid CS [computer science] degree from a reputable university or relevant work experience. (Bloomberg)

How investment banks are using big data (Open Data Institute)

Chinese firms are not doing deals in the U.S. (Bloomberg)

Former Goldman Sachs banker using virtual reality to market super-homes (Bloomberg)

Are you a ‘toxic handler’ at work? (NY Mag)

Test your booze knowledge (New Scientist)

Contact: pclarke@efinancialcareers.com

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