Banks Poised to Underwhelm This Earnings Season

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Heard on the Street: This earnings season, the Wall Street arms of banks won't be giving their Main Street counterparts much help

By Telis Demos Oct. 12, 2019 8:03 am ET Banks’ Wall Street arms won’t be giving their Main Street counterparts much help this earnings season.

So far, though, that isn’t what is playing out. While there has been a jump in some issuance, notably corporate bonds, activities including loan syndication, merger advisory and initial public offerings all dropped off in the third quarter relative to the same period a year ago. On the whole, Dealogic estimates that global investment banking revenue was $18.6 billion for the third quarter, down 2% from a year ago.

There is also the question of how the repo-rate spike of September affected traders and desks. Perhaps some repo dealers earned fatter spreads. But if cash was tight just as traders came back to their seats from summer holidays, that would have made it tougher for leveraged players like hedge funds or nonbank dealers to take on new positions.

But there are also traps. Analysts expect that investment banks with some big equity investments may have to take markdowns that would affect earnings, including on stakes in Uber and Tradeweb.

 

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So what you're saying is that the casinos are not profitable this season?

Fuck wells Fargo

Makes sense some banks never did much but reject anyway

Cramer said the opposite on Friday.

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U.S. banks are heading deeper into earnings mireM&A and stock deals are at multi-year lows. Falling rates are hitting interest income. Trading looks flat. That’s before throwing in risks like repo, recession, tariffs and elections. Wall street bosses talk a good game, but the summer share-price drops may just be the start.
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