Category: 3. Business

(Reuters) -Jack Henry reported a 26% jump in fourth-quarter profit on Tuesday, buoyed by robust demand for its banking technology offerings.

While heavy hitters such as JPMorgan Chase have poured billions into developing their infrastructure, small- and mid-sized financial institutions turn to the likes of Jack Henry for tech modernization.

Technology is crucial for banking firms to meet the evolving needs of their account holders and to stay competitive with their larger rivals.

Monett, Missouri-based Jack Henry provides technology and payment processing services to banks and credit unions.

Analysts said the company’s narrow focus on bank tech has allowed it to maintain a competitive advantage against larger peers such as Fiserv and FIS.

“Our strong fourth-quarter sales wins for core, complementary and payment solutions, along with our ongoing success winning larger financial institutions and maintaining a very healthy pipeline for fiscal year 2026, demonstrate the continued strength in technology spending,” Jack Henry CEO Greg Adelson said.

The company’s fourth-quarter revenue jumped 9.9% to $615.4 million from a year ago.

Profit rose to $127.6 million, or $1.75 per share, in the three months ended June 30, compared with $101 million, or $1.38, a year earlier.

Jack Henry expects its fiscal 2026 profit per share to be between $6.32 and $6.44. It projected annual revenue of $2.48 billion to $2.50 billion.

FEES BOOST

Jack Henry’s deconversion revenue roughly tripled to $20.5 million in the fourth quarter from a year earlier, underscoring an uptick in banking M&A activity.

Bulk of the deconversion revenue, or one-time contract termination fee, is generated when one of Jack Henry’s clients agrees to be acquired by another financial institution.

Such fees tend to be volatile and tied closely with the banking cycle.

In recent years, Jack Henry has had to contend with fluctuations on the deconversion revenue front as the pandemic and the regional banking crisis stalled M&A activity.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shreya Biswas)

While EU bonds have traded well-supported over the summer, that picture saw a sudden dent as spreads widened out on the news that the index provider ICE has again decided against the inclusion of EU bonds into its sovereign indices. The notion of course has been, that such an inclusion would have created additional structural demand from investors tracking these indices. Spreads over swaps accordingly widened by more than 2bp on the back of the disappointing news, with prospects of the next EU auction being just around the corner next week perhaps playing into the mood.

The decision by ICE is also not entirely surprising since the tangible progress on fronts such as establishing the EU as a permanent issuer remains modest. The outstanding volume of EU bonds is still set to increase next year as remaining NGEU support is disbursed, but starting in 2028 the NGEU debt will be repaid. Offsetting that 18 countries have signed up for a total of €127bn from the EU’s SAFE instrument to support European defence efforts, but it is also a one-off instrument.

Last month the EU Commission’s 2028-2034 proposal for the EU long-term budget does call for the creation of a permanent EU crisis mechanism with a fire power of close to €400bn and a loan facility of €150bn called “Catalyst Europe” to help member states invest in EU objectives. Another large chunk that could be funded is the financial support of Ukraine. But especially with a view to the first two instruments, they are only proposals so far and may still face pushback. And the discussions around the next EU long-term budget will likely run through 2026.

That being said we also have to acknowledge that since the US was stripped of its last AAA rating ahead of summer, the global AAA-sovereign and supranational debt segment has slimmed down considerably to just below US$10tr, of which more than half now is in EUR. Any investor explicitly seeking AAA-exposure will not get around the German debt market of €2.25tr, the most liquid AAA debt available, and the next largest AAA segment which is the EUR-denominated supranational issuer segment of around €1tn, which of course is dominated by the EU with an outstanding of €0.66tr.

By Christine Idzelis

The Russell 2000, a gauge of U.S. small-cap stocks, is beating the S&P 500 so far in August

There may not be much runway left for small-cap stocks after their recent pop relative to large-cap equities, RBC Capital Markets cautions.

The recent outperformance in small-cap stocks will probably run out of steam after rallying on increased optimism that the Federal Reserve will lower interest rates over the next year, according to RBC Capital Markets.

The Russell 2000 index RUT, a measure of small-cap stocks in the U.S., has risen 2.9% so far in August through Tuesday, according to FactSet data. That easily exceeds the 1.1% gain this month for the S&P 500 SPX, a benchmark for U.S. large-cap equities.

For sustainable outperformance, small-cap stocks “tend to need an outright recession or a very hot economy,” said Lori Calvasina, head of U.S. equity strategy research at RBC Capital Markets, in a note emailed Tuesday. Such conditions “are lacking at the moment,” she said.

RBC is “neutral” on small-cap stocks over the next six to 12 months, partly because of “elevated valuations” and expectations for U.S. gross domestic product to expand at a slower pace, according to the note. Calvasina found that the Russell 2000’s recent rally took the ratio of small-cap to large-cap performance to the “high end of its post-Liberation Day range” around the middle of last week.

The Russell 2000’s outperformance last week “had more to do with a ramping up of Fed cut expectations” than the outlook for earnings for small-cap stocks, she said. Should expectations for Fed rate cuts continue to grow, the near-term outlook for earnings and “deep net short positions” may help keep small-cap trading going, according to her note.

“But our valuation work suggests that there may not be too much runway here as the Russell 2000 P/E is already above average at 16.3x,” Calvasina wrote, referring to the price-to-earnings ratio for the U.S. small-cap stock index.

Small caps have broadly trailed so far in 2025, with the Russell 2000’s 2.1% rise year to date lagging the S&P 500’s 9% gain, FactSet data show.

“Some stabilization has emerged after the tariff tantrum when financial market participants began to price in cuts again,” said Calvasina. While the weak July jobs report, released earlier this month, “caused Fed cut bets to ramp up again,” it wasn’t until last week’s inflation reports for July that small caps saw “a noteworthy lift” relative to large caps, according to her note.

Investors are expecting the Fed to cut rates this year, potentially as soon as next month.

Traders in the federal-funds-futures market saw on Tuesday an 84.8% probability that the Fed will lower its benchmark rate by a quarter percentage point at its next policy meeting in September, according to the CME FedWatch Tool, at last check. They were anticipating that the Fed, which currently maintains its policy rate at a range of 4.25% to 4.5%, will cut rates two or three times by yearend.

Meanwhile, central bankers will gather in Wyoming this week for the annual Jackson Hole Economic Policy Symposium, with Fed Chair Jerome Powell’s speech scheduled for Friday.

Read: Will Powell use Jackson Hole speech to push back on hopes for September rate cut?

Deep rate cuts and lengthy recessions are typically “springboards” for leadership in small caps, according to the RBC note. But quick recessions, as seen in 2020, or cutting cycles that are short and shallow, as they were in 1995 and 1998, have tended to result in small-caps seeing a “brief leadership trade” without “a major pivot towards outperformance,” the chart below shows.

RBC CAPITAL MARKETS

As of mid-August, RBC expected U.S. GDP growth would slow to 1.6% in 2025 and to 1.3% in 2026, the note shows. Last year, real GDP increased 2.8%, according to Calvasina’s note.

The U.S. stock market closed mostly lower Tuesday, with the S&P 500 falling 0.6%, the technology-heavy Nasdaq Composite COMP dropping a sharp 1.5% and the Dow Jones Industrial Average DJIA eking out a gain of less than 0.1% to finish nearly flat. The Russell 2000 index declined 0.8%.

-Christine Idzelis

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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Gold declined as traders weighed US-led efforts to end the war in Ukraine and counted down to the Federal Reserve’s annual Jackson Hole gathering, which may yield hints on possible interest-rate cuts.

Fed Chair Jerome Powell is scheduled to deliver a keynote address at the central bankers’ meeting on Friday, and his remarks may reinforce investors’ widespread expectations for looser monetary policy. Lower borrowing costs typically benefit the precious metal, a non-yielding asset.

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The emails from Air Canada came without warning: flights cancelled at the last minute, no way to get home and no one at Air Canada answering the phones despite repeated calls. Days went by without a solution.

The disruption stems from a strike that began on Aug. 16 when some 10,000 Air Canada flight attendants walked off the job after months of unsuccessful talks over compensation and working conditions. In the wake of it, more than 100,000 passengers were left stranded.

A tentative agreement to end the contract dispute between Air Canada and its flight attendants has since been reached, and flights are gradually resuming. But many travellers are still stuck abroad or facing lengthy layovers and long lines in crowded airports as they rebook alternative routes.

For those caught up in it, the experience has been draining and overwhelming. Air Canada has said it could take up to a week for full operations to resume, leaving Canadians stranded abroad, still waiting for a path home.

I am one of those stranded passengers. I also teach management and study how people respond in high-stress, uncertain situations and how they can handle them more effectively.

Research has long shown that uncertainty and scarcity push ordinary people toward frustration and conflict, often in ways that make matters worse. In this piece, I will share a few research-backed strategies to help make an unbearable situation a little easier to navigate.

Why this moment feels so stressful

The Air Canada strike combines three powerful stressors: uncertainty, lack of control and crowding. Travellers do not know when or how they will get home, they cannot influence the pace of solutions and they are surrounded by others competing for the same resources.

Each of these factors is already stressful on its own, and combined, they can overwhelm even the most patient individuals. In these volatile conditions, frustration builds and there is a strong urge to lash out.

Anger might seem like a way to regain control, or at least to feel noticed in the chaos. While it’s an understandable reaction, it rarely improves such situations.

Reacting out of anger often leads us to make emotional rather than rational decisions, such as yelling to feel heard. This behaviour can close off communication with the very people whose help is needed. It also drains our resilience at the moment when it matters most.

Importantly, anger is often directed at front-line staff who represent the organization, but have little control over the root causes of disruption. In ordinary times, these employees already face a considerable amount of abuse from customers. In moments of widespread disruption, that mistreatment can quickly become unbearable.

What you can do instead

Although the situation is frustrating and unfair, research has identified practical ways to make it a little more bearable and of improving how travellers navigate it. Here are three strategies supported by scientific studies, including research I conducted with colleagues:

1. Remember this is a collective problem.

My research has found that people stuck in crowded environments feel less frustrated when they think of the situation in collective terms. Airline staff are not opponents; they are trying to help thousands of stranded passengers at once. Approach them as partners in a shared challenge as much as you can. Seeing the situation as a collective issue, rather than a personal one, can make it easier to cope and connect with those who can assist you.

2. Bring your attention inward.

Crowded airports and long layovers can make every minute feel longer and harder to go through. In several studies on how to handle stressful crowds, my co-researchers and I found that focusing on personal media — a book, a tablet or music through headphones — can reduce stress by narrowing your sense of the crowd. Instead of feeding off the chaos and getting more agitated, try to give your mind a smaller, calmer space to settle in. The wait may still be long, but it will feel more manageable.

3. Be polite and respectful with staff.

Showing respect isn’t just courteous; it’s an effective way to manage conflict. In their book Getting to Yes, negotiations experts Roger Fisher and William Ury famously argued to “separate the people from the problem.”

This lesson applies here as well: always treat staff with dignity, even when the situation is frustrating, and focus on solving the real issue. Airline employees may have limited resources, but they are more likely to help travellers who remain calm, clear and respectful.

None of this diminishes how exhausting and unfair the situation feels. However, while travellers cannot control cancelled flights or the pace of labour negotiations, we can control how we respond to these stressors.

Seeing the situation as a shared problem, finding ways to manage our own stress and treating staff with respect can make the experience more bearable. More importantly, these strategies improve our chances of getting help when opportunities arise.

The FDA has issued a complete response letter (CRL) to the supplemental biologics license application (sBLA) seeking the approval of daratumumab and hyaluronidase-fihj (subcutaneous daratumumab; Darzalex Faspro) in combination with bortezomib (Velcade), lenalidomide (Revlimid), and dexamethasone (D-VRd) for the treatment of adult patients with newly diagnosed multiple myeloma who are ineligible for or have deferred autologous stem cell transplant (ASCT).¹

In an announcement on August 1, Johnson & Johnson explained that the CRL cited observations from facility inspections; the letter was not related to safety and efficacy data for D-VRd, and no additional clinical studies were requested. In a news release, Johnson & Johnson announced that there has been no impact on the product supply or commercial availability of subcutaneous daratumumab, and it remains available for use in other approved indications in the United States.

“We are working closely with the FDA and are confident in our ability to promptly resolve the matter,” Yusri Elsayed, MD, MHSc, PhD, global therapeutic area head of Oncology, Innovative Medicine, at Johnson & Johnson, stated in a news release. “Health care professionals and patients can be assured of no impact to the current use or supply of [daratumumab (Darzalex)] and [subcutaneous daratumumab], which are foundational therapies for treating multiple myeloma.”

The sBLA was supported by findings from the phase 3 CEPHEUS trial (NCT03652064), which demonstrated that patients receiving D-VRd achieved a significantly higher rate of minimal residual disease (MRD) negativity compared with those who received the standard triplet regimen of VRd.² In CEPHEUS, treatment with D-VRd (n = 197) led to an MRD-negativity rate of 60.9% at 10⁻⁵ sensitivity compared with a rate of 39.4% in the VRd-alone arm (n = 198; OR, 2.37; 95% CI, 1.58-3.55; P < .0001). Patients treated with the quadruplet regimen also experienced deeper clinical responses, with a complete response (CR) or better rate of 81.2% vs 61.6% with VRd alone (OR, 2.73; 95% CI, 1.71-4.34; P < .0001).

An Overview of the CEPHEUS Clinical Trial

CEPHEUS was a global, randomized trial that enrolled patients with newly diagnosed multiple myeloma who were ineligible for or had deferred ASCT. All patients had an ECOG performance status of 0 to 2 and a frailty score of 0 or 1.

Patients were randomly assigned to receive either D-VRd or standard VRd. In the D-VRd arm, subcutaneous daratumumab was administered at 1800 mg weekly for the first 2 cycles, then every 3 weeks during cycles 3 to 8. Bortezomib, lenalidomide, and dexamethasone were dosed in 21-day cycles. From cycle 9 onward, daratumumab was given every 4 weeks in combination with lenalidomide and dexamethasone; patients in the control arm continued lenalidomide and dexamethasone alone.

The primary end point was rate of MRD negativity with a CR or better. Secondary end points included progression-free survival (PFS), rate of sustained MRD negativity with a CR or better for at least 12 months, rate of CR or better, and overall survival (OS).

Additional findings showed that MRD negativity at a sensitivity of 10⁻⁶ was achieved in 46.2% of patients receiving D-VRd vs 27.3% of those treated with VRd (OR, 2.24; P = .0001). Sustained MRD-negativity lasting at least 12 months at a sensitivity of 10⁻⁵ was reported in 48.7% of patients in the D-VRd group compared with 26.3% of those in the VRd group (OR, 2.63; P < .0001).

The median PFS was not reached in the D-VRd group compared with 52.6 months for VRd alone (HR, 0.57; P = .0005). The 54-month PFS rates were 68.1% vs 49.5%, respectively. OS data were not yet mature, but a trend favoring D-VRd was observed (HR, 0.85), which strengthened when censoring for COVID-19–related deaths (HR, 0.69).

D-VRd’s Safety Profile

Grade 3/4 treatment-emergent adverse effects (TEAEs) were observed in 92.4% of patients receiving D-VRd and 85.6% of those receiving VRd alone. Discontinuation of all study drugs due to TEAEs occurred in 7.6% of D-VRd–treated patients and 15.9% of patients in the VRd group. Grade 5 non–COVID-19 TEAEs occurred in 10.7% of patients in the D-VRd arm vs 7.7% of those in the VRd arm.

Common all-grade TEAEs in the D-VRd vs VRd arms included blood/lymphatic disorders (82.7% vs 64.6%), neutropenia (55.8% vs 39.0%), thrombocytopenia (46.7% vs 33.8%), anemia (37.1% vs 31.8%), gastrointestinal disorders (79.7% vs 81.5%), and peripheral sensory neuropathy (55.8% vs 61.0%). Most peripheral neuropathy cases were low grade, with grade 3/4 neuropathy rates of 8.1% vs 8.2%, respectively.

References

1. Update on U.S. regulatory review of supplemental biologics license application. News release. Johnson & Johnson. August 1, 2025. Accessed August 19, 2025. https://www.jnj.com/media-center/press-releases/update-on-u-s-regulatory-review-of-supplemental-biologics-license-application
2. Usmani SZ, Facon T, Hungaria V, et al. Daratumumab SC + bortezomib/lenalidomide/dexamethasone in patients with transplant-ineligible or transplant-deferred newly diagnosed multiple myeloma: results of the phase 3 CEPHEUS study. Presented at: 21st International Myeloma Society Annual Meeting; September 25-28, 2024; Rio de Janeiro, Brazil. Abstract OA-63.

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