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Your guide to what the 2024 US election means for Washington and the world
Donald Trump’s return to the White House It could fuel a blockbuster run on Wall Street in 2025, but concerns over inflationary policies and global tensions remain as major U.S. banks report higher quarterly earnings.
Many of Wall Street’s biggest CEOs Banks presented on Wednesday Good views This year, especially for their investment banking businesses, which have seen gains in recent months.
Cautious optimism shows how many U.S. executives are hoping the president-elect’s promise of increased growth and deregulation will be good for their businesses, even if they worry the sometimes misguided policymaking will be good for their businesses.
CEO of Goldman Sachs David Solomon “There has been a meaningful shift in CEO confidence, particularly following the US election results,” he said on Wednesday. In addition, there is . . An increase in overall trading demand supported by an improved regulatory backdrop.
“The combination of these conditions should stimulate further activity in 2025,” he added.
BNI CEO Robin Vince added: “The incoming Trump administration has made it clear that they are pro-growth. . . If that growth turns into action, which we hope it will, we think that’s a good final backdrop.
The bull runs the gamut from mergers and acquisitions to debt issuance and plans to float more companies on the public market, the bankers said.
According to JPMorgan chief financial officer Jeremy Barnum, the United States is “in the spirit of animals . . . We are happy to see more optimism in the country’s c-suites and in some pockets globally.
The banks’ expectations for a stronger 2025 come after they reported a sharp increase in earnings in the final quarter of last year: JPMorgan’s net income rose 50 percent to $14 billion, while Goldman’s doubled to $4.1 billion. Citi turned a $1.8 billion loss to a $2.9 billion profit in the final quarter of 2023.
Shares in Citi jumped 7 percent after the results, Goldman gained 5 percent and JPMorgan gained more than 1 percent.
The banks benefited from a strong run in equity trading before and after Trump won the election in November. His win sent stocks higher, though markets gave up a large share of those gains.
Investment bank Companies excel at tapping into sanguine market conditions to raise money through the sale of stocks and bonds. A revival in M&A activity has provided impetus.
Even Wells Fargo, which derives most of its revenue from its consumer and corporate businesses, saw significant growth from its investment bank.
In the year Significant payments to replenish the Federal Deposit Insurance Fund, which hurt profits in the final quarter of 2023, complimented the year-over-year comparison overall net profit.
Despite the strong showing, top financiers warned that enthusiasm could be fueled by geopolitical turmoil or economic shocks caused by rapid government policy changes under Trump, taking unexpected paths during his first term in office from 2017 to 2021.
“Geopolitical conditions remain the most dangerous and complex since World War II,” warned JPMorgan CEO Jamie Dimon.
Not only has Trump vowed to deport illegal immigrants en masse and impose huge tariffs, but he’s also been shown taking over Greenland and the Panama Canal, among other things.
“It’s a complicated world, so I think we all have to be on our toes and prepare for the unexpected,” Solomon said. “When you look broadly at immigration policy, trade policy, tax policy, energy policy, there is uncertainty. . . There are different outcomes.”
They warned that a return to high inflation could shake markets, pressure corporate earnings and dry up deals.
“I think the economy is in pretty good shape,” BlackRock CEO Larry Fink told CNBC. That being said, is it in great shape? Are we going to start seeing higher inflation? We will see,” he said.
The world’s largest money manager reported that it attracted a record amount of new funds in the second half of 2024.
Additional reporting by Zehra Munir in New York and Harriet Agnew in London
