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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Trading and investment banking buoyed third-quarter results at BNP Paribas, helping offset weakness in commercial and retail operations at the Eurozone’s biggest bank.

The Paris-listed lender reported quarterly net income of €2.87bn, 5.9 per cent higher than a year ago, and a 2.7 per cent increase in revenues to €11.9bn. Both figures were in line with analysts’ expectations.

Gains were driven by BNP’s global markets business, with a particularly sharp uptick in demand for prime brokerage services as hedge funds sought to capitalise on volatile equity markets and uncertainty around major global events such as the US election.

Although investment banks across Europe and the US have reported strong performance in equities trading this quarter, BNP posted gains across both its equities and fixed-income trading businesses.

Revenues in BNP’s equity and prime services division were 13 per cent higher than a year ago at €820mn, while its fixed-income traders increased revenues by 12 per cent to €1.2bn.

The bank’s historic strength has been fixed income. But it is now benefiting from several years of investment in its equities business and from building up its prime brokerage offering, where it has taken over teams and clients from Deutsche Bank.

The bank also benefited from the tentative recovery in investment banking. Revenues in its global banking operations rose 5.9 per cent, driven by capital markets activity across Europe, Middle East and Africa and transaction banking in the Americas and the Asia-Pacific region.

This balanced out some weakness in commercial and retail banking which fell 2.6 per cent in the quarter — below consensus estimates from Oddo BHF — due to falling revenues from disposals of used cars at its long-term rental service Arval.

Shares in the French bank, which is seen as a proxy for the economy, sank after President Emmanuel Macron unexpectedly dissolved parliament and called elections in June.

However, they have recovered after the July vote delivered a hung parliament and are up more than 3 per cent this year for a market value of €74bn. They trail the Stoxx 600 banking index which has gained more than 20 per cent in the same period.  

“The third quarter illustrates corporate and investment banking’s capacity to gain market share and . . . strong business momentum especially in insurance and asset management,” said chief executive Jean-Laurent Bonnafé. He added that the commercial and retail banking operation “is likely to gradually benefit from the positive shift in the rate environment”. 

BNP said it had achieved €655mn in cost savings in the first nine months of 2024 against a target of €1bn, with a further €345mn expected in the final quarter.

The bank’s common equity tier one ratio fell 30 basis points in the three months to September 30 to 12.7 per cent, but the measure of financial resilience remains well above regulatory requirements and the banks own target.

“BNP remains very attractive in terms of risk [versus] reward as it is very diversified with a solid balance sheet,” analysts at Oddo BHF wrote ahead of the results. 

BNP affirmed its full-year guidance, including a target to increase revenues by at least 2 per cent over 2023 levels.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Investing in technology companies involves weighing up expected quantities of jam today, jam tomorrow and jam at some unknown future date. Facebook parent Meta Platforms and Microsoft are serving up just enough of each.

Both reported earnings on Wednesday that — like Google parent Alphabet the previous day — outpaced what analysts expected. Microsoft’s cloud computing business increased revenue by 22 per cent, a little faster than the previous quarter. Meta’s sales of advertising increased by 19 per cent, and it exacted 11 per cent more per ad than a year earlier. Today’s jam, then, is safely taken care of.

Tomorrow is less certain. Since artificial intelligence mania took hold, quarterly earnings have become a kind of sanity check, whereby investors reassess how they feel about tech companies’ lavish investment plans. Steady share prices depend on corporate chiefs like Meta’s Mark Zuckerberg and Microsoft’s Satya Nadella walking a fine line between being bullish about AI’s potential and remaining credible about its financial returns.

On that front, the $1.5tn-valued Meta is in the more precarious position. It has told investors to brace for “significant acceleration” in capital expenditure next year. Spending is already double what it was three years ago, weighing in at a quarter of revenue. Like Microsoft, Meta is buying chips and servers, but where Microsoft in effect rents space in its cloud to clients, Meta’s is largely for its own use.

Meta’s other challenge is that, compared with some of its peers, its boldest prospects are relatively long-tailed. That makes it different from chipmaker Nvidia, say, which sells AI-enabling silicon for real money. Microsoft already has recurring revenue from corporate customers. Facebook, meanwhile, is building new products such as social network Threads, virtual assistants and AI-generated video ads with yet-to-be determined value.

Zuckerberg has at least read the room, and is making the case that AI will bring near-term pay-offs too. More than 1mn advertisers used Meta’s generative AI tools in the past month, for example, and the company thinks those tools make users 7 per cent more likely to click. Analysts have raised their forecasts for Meta’s revenue in 2026 by $30bn over the past year, to $210bn, according to LSEG.

As for the distant-future jam — such as the recently unveiled augmented-reality holographic glasses the company describes as “the next great leap” — investors aren’t putting much weight on that at all. Meta’s share price has risen 70 per cent this year, but that still implies almost $400bn of negative value for its far-out bets, Morgan Stanley analysts believe. Big ideas can drive big valuations, but only up to a point.

john.foley@ft.com

NEW YORK — A pig at an Oregon farm was found to have bird flu, the U.S. Department of Agriculture announced Wednesday. It’s the first time the virus has been detected in U.S. swine and raises concerns about bird flu’s potential to become a human threat.

The infection happened at a backyard farm in Crook County, in the center of the state, where different animals share water and are housed together. Last week, poultry at the farm were found to have the virus, and testing this week found that one of the farm’s five pigs had become infected.

The farm was put under quarantine and all five pigs were euthanized so additional testing could be done. It’s not a commercial farm, and U.S. agriculture officials said there is no concern about the safety of the nation’s pork supply.

But finding bird flu in a pig raises worries that the virus may be hitting a stepping stone to becoming a bigger threat to people, said Jennifer Nuzzo, a Brown University pandemic researcher.

Pigs can be infected with multiple types of flu, and the animals can play a role in making bird viruses better adapted to humans, she explained. The 2009 H1N1 flu pandemic had swine origins, Nuzzo noted.

“If we’re trying to stay ahead of this virus and prevent it from becoming a threat to the broader public, knowing if it’s in pigs is crucial,” Nuzzo said.

The USDA has conducted genetic tests on the farm’s poultry and has not seen any mutations that suggest the virus is gaining an increased ability to spread to people. That indicates the current risk to the public remains low, officials said.

A different strain of the bird flu virus has been reported in pigs outside the U.S. in the past, and it did not trigger a human pandemic.

“It isn’t a one-to-one relationship, where pigs get infected with viruses and they make pandemics,” said Troy Sutton, a Penn State researcher who studies flu viruses in animals.

This version of bird flu — known as Type A H5N1 — has been spreading widely in the U.S. among wild birds, poultry, cows and a number of other animals. Its persistence increases the chances that people will be exposed and potentially catch it, officials say.

It isn’t necessarily surprising that a pig infection was detected, given that so many other animals have had the virus, experts said.

The Oregon pig infection “is noteworthy, but does it change the calculation of the threat level? No it doesn’t,” Sutton said. If the virus starts spreading more widely among pigs and if there are ensuing human infections, “then we’re going to be more concerned.”

So far this year, nearly 40 human cases have been reported — in California, Colorado, Washington, Michigan, Texas and Missouri — with mostly mild symptoms, including eye redness, reported. All but one of the people had been to contact with infected animals.