Why Macquarie Group Ltd Shares Dropped Today

By ,

What Happened to the Macquarie Group Share Price?

Shares of Macquarie Group Ltd [ASX:MQG] fell more than 1.5% today as the company announced lower profits from two of its key divisions — capital markets and annuities.

Why is the MQG Share Price dropping?

Macquarie’s warning about lower-than-expected profits from these groups follows a report yesterday from National Australia Bank Ltd [ASX:NAB] that its first-quarter earnings would be lower too.

The ongoing era of low interest rates is making it harder for banks to make big margins on money it lends to businesses and consumers. Plus, the fears of an Australian recession, following the third-quarter economic contraction last year, means that some businesses are being more cautious with their spending and investment plans.

What now for Macquarie Group Ltd?

Bank shares had a good run in 2016, and Macquarie Group was one of them. From mid-February 2016 through to today, the Macquarie share price is up over 38%.

The issue for investors is whether this can continue. With talk of the Reserve Bank of Australia potentially cutting rates further this year, it’s possible that the good run for banks may be over as further margin pressure is applied.



About Money Morning Editorial

Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the…

Vulcan Energy Shares Surge on Stellantis Equity Stake

Lithium developer Vulcan Energy [ASX:VUL] rose as much as 30% on Friday after conglomerate automaker Stellantis made a $76 million equity investment in the stock.

PayGroup Shares Rise 150% on Takeover Bid

Human capital management and payroll firm PayGroup [ASX:PYG] soared on Thursday after global payroll platform Deel made a $119 million offer.

Pilbara Minerals Pre-Auction Bid Reflects ‘Strong Demand’

Australian lithium producer Pilbara Minerals [ASX:PLS] secured a pre-auction bid of over US$7,000/dry metric tonne.

Humm Shares Fall on Director Exodus

Humm Group [ASX:HUM] shares fell on Wednesday as the fallout of the scrapped Latitude deal triggers a director exodus. The saga of Humm’s failed sale of its consumer finance segment to Latitude rolls on. Humm’s majority directors are on their way out. Two directors have resigned effectively immediately, while three others — including Humm chair … Read More

Lake Resources (ASX:LKE) Shares Fall 45% in a Week

Lake Resources (ASX:LKE) shares continue to plummet as investors remain uncertain about the significance of the departure of LKE’s managing director.

Weebit Nano Shares Jump on ReRAM Update

Memory-technology developer Weebit Nano [ASX:WBT] revealed it will demonstrate its ReRAM module technology to the public.