AI Risks Keep Growing as Earnings Season Begins

Good morning.

Welcome back to The Financial Exchange.

It's Mike, Paul, and Tucker with you on a bank earnings week, CPI week, busy week for a whole lot of stuff going on here, but markets relatively muted.

They were open but quiet yesterday for the Columbus Day holiday.

Bond market was actually closed yesterday, but equity markets open, one of those weird days that we get a few times a year.

Uh, we had reports from JPMorgan Chase, Goldman Sachs, Wells Fargo, Citigroup all this morning indicating a few things.

One, uh, with equity markets continuing to accelerate higher, the banks have all made a fair bit of money on both their wealth management and, uh, prop trading desks.

Uh, you saw some losses, however, on their fixed income books.

No, no surprise there as interest rates moved up during the quarter, especially during September.

Uh, bonds not performing all that well.

But their net interest margin across the board doing much better with those higher rates, uh, on deposits, because one thing that I think we all know is if you're a big bank, you don't need to pay any interest.

It's not one of the expectations for you anymore.

Uh, y- you're not expected to compete on money market rates or mortgage rates or anything.

You're just expected to be the giant that can't go out of business, and therefore, people will deposit their money at your bank, whether you pay any interest or not.

Yeah.

Anything else, uh, interesting in terms of bank earnings, Paul? I, I mean, you know, there's some interesting stuff from Goldman Sachs on, uh, their investment banking.

I think still some very high expectations because there does not seem to be any end in sight for issuing new debt on the behalf of hyperscalers, and we still have a few potential giant IPOs to go over the course of the next couple of quarters here.

But, uh, to me, th- that was, that was the big story with the banks this morning.

Yeah, nothing, uh, really that, that stands out.

I think you hit on most of the, the critical points here.

I would say a reasonable start to earnings season, but there is still much more to come.

The, the banks tend to kind of all blend together.

We picked up some of the same recurring themes from each of them, so nothing that stands out tremendously.

Uh, in addition to the big banks, UnitedHealthcare, Johnson & Johnson, and, uh, my favorite, Domino's Pizza, reported earnings this morning.

Uh, tomorrow we will hear from Bank of America, Morgan Stanley, BlackRock, uh, a bunch of different financials, Progressive even, uh, as well.

Good morning.

Welcome back to The Financial Exchange.

It's Mike, Paul, and Tucker with you on a bank earnings week, CPI week, busy week for a whole lot of stuff going on here, but markets relatively muted.

They were open but quiet yesterday for the Columbus Day holiday.

Bond market was actually closed yesterday, but equity markets open, one of those weird days that we get a few times a year.

Uh, we had reports from JPMorgan Chase, Goldman Sachs, Wells Fargo, Citigroup all this morning indicating a few things.

One, uh, with equity markets continuing to accelerate higher, the banks have all made a fair bit of money on both their wealth management and, uh, prop trading desks.

Uh, you saw some losses, however, on their fixed income books.

No, no surprise there as interest rates moved up during the quarter, especially during September.

Uh, bonds not performing all that well.

But their net interest margin across the board doing much better with those higher rates, uh, on deposits, because one thing that I think we all know is if you're a big bank, you don't need to pay any interest.

It's not one of the expectations for you anymore.

Uh, y- you're not expected to compete on money market rates or mortgage rates or anything.

You're just expected to be the giant that can't go out of business, and therefore, people will deposit their money at your bank, whether you pay any interest or not.

Yeah.

Anything else, uh, interesting in terms of bank earnings, Paul? I, I mean, you know, there's some interesting stuff from Goldman Sachs on, uh, their investment banking.

I think still some very high expectations because there does not seem to be any end in sight for issuing new debt on the behalf of hyperscalers, and we still have a few potential giant IPOs to go over the course of the next couple of quarters here.

But, uh, to me, th- that was, that was the big story with the banks this morning.

Yeah, nothing, uh, really that, that stands out.

I think you hit on most of the, the critical points here.

I would say a reasonable start to earnings season, but there is still much more to come.

The, the banks tend to kind of all blend together.

We picked up some of the same recurring themes from each of them, so nothing that stands out tremendously.

Uh, in addition to the big banks, UnitedHealthcare, Johnson & Johnson, and, uh, my favorite, Domino's Pizza, reported earnings this morning.

Uh, tomorrow we will hear from Bank of America, Morgan Stanley, BlackRock, uh, a bunch of different financials, Progressive even, uh, as well.