Bank stocks are often perceived to be a harbinger of broader economic trends so BankerAdvisor wheeled around some of the big banks’ reported second quarter earnings to spot broad movements

Tea Leaves and Emerging Economic Trends

DOGEing a Crisis

The Impact of Two Consumer Classes and the Fed Funds Rate Outlook 

A Tale of Two Consumers

United States

North America

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ARK Invest founder and CEO Cathie Wood expects that a “changing of the guard” at the United States Securities and Exchange Commission may turbocharge the economy and bring about an influx of innovation and investment in emerging technologies.  “Deregulation, defanging the SEC, FTC, and others, government spending cuts, tax cuts, and a focus on technologically enabled innovation are likely to turbocharge the US economy,” she said, in sharing a video posted by ARK Invest on X on Nov. 11. “We have more clarity now in terms of the investment landscape after the election,” 

‘Defanging the SEC’ may turbocharge US economy: Cathie Wood

Calastone, the largest global funds network, has today released groundbreaking research, revealing that tokenisation – the process of transforming asset ownership into digital tokens on a blockchain – holds the potential to unlock over $135 billion[2] in cost savings for the asset management industry. The research also identifies that fund processing costs are projected to rise by 32% over the next three years, putting firms under increasing pressure to modernise.

Calastone Research Reveals Tokenisation Could Save $135 billion for Asset Management Industry

Guernsey stock exchange now provides a facility for trading shares in privately held companies. A stock exchange based in the Channel Islands is trying to capitalise on a global drought in initial public offerings with the launch of a facility for buying and selling shares in privately held companies. But this reinvention of its role looks likely to attract stiff competition from larger rivals. The International Stock Exchange (TISE) — which has, for years, specialised in providing a listing venue for corporate debt — last year launched a unit allowing private companies to run auctions in their own shares, without the need for a broker.


TISE finds best place to capitalise on private assets

Jefferies Financial reported an over three-fold rise in fourth-quarter profit on Wednesday as the investment bank earned higher fees from deal advisory and underwriting activity remained strong. An ebullient market, falling interest rates and hopes for an easier regulatory environment under the incoming Trump administration have boosted corporate sentiment toward mergers and acquisitions. Initial public offerings and debt offerings also saw a significant improvement in the second half of 2024.Global investment banking revenue surged 26% to $86.8 billion in 2024, led by North America, which recorded a 33% increase, according to data from Dealogic. Jefferies earned the seventh highest fees across banks over the same period.

Jefferies’ profit more than triples on investment banking windfall

Nearly half of bank leaders believe their institutions will buy another bank in 2025, suggesting a potential uptick in merger activity in the coming year, according to a new survey on M&A by Bank Director. Forty-three percent of bank leaders said their institutions were very or somewhat likely to buy another bank next year, up from 35% a year earlier, Bank Director reported. As for the reasons, respondents cited scale to drive technology and other investments (43%) and geographic expansion (37%) as the two most important factors driving acquisition strategies.

Bank Leaders Expect Merger Activity to Accelerate in 2025

Circle Internet, the US group behind the world’s second-largest stablecoin, has filed to list in New York, the first major cryptocurrency company to try for an initial public offering since President Donald Trump ushered in a more favourable environment towards digital assets. 
The firm lodged its application with regulators for an IPO on the New York Stock Exchange late on Tuesday, having filed initial paperwork at the start of last year, after a previous attempt fell through in late 2022.  Tuesday’s filing shows Circle’s revenues on the reserves it maintains to back its USDC stablecoin jumped to $1.66bn last year, from $1.4bn in 2023. 


Stablecoin operator Circle files for IPO as revenues jump to $1.7bn

Swiss banks say they have seen a surge of interest and business from high-net-worth Americans opening investment accounts in recent months. Switzerland’s neutral politics, stable economy, strong currency and reliable legal system are all a draw for clients. While opening a Swiss bank account decades ago may have carried a trace of elicit tax evasion, today it’s highly regulated and more widespread, complete with tax forms and reporting.

More rich Americans are opening Swiss bank accounts fearing U.S. risks

The new research looks at the UK’s banking sector and how it compares to other G8 countries. It notes that as a result of deregulation reforms, stable interest rates, and divestment of price equity firms as funds near the five-year mark post-pandemic, 2024 could be a pivotal year for UK banking, especially from a job searcher’s point of view. Since 2022, risk and compliance has consistently been the most in-demand area in banking recruitment. This trend is expected to continue in 2024, with 4,559 vacancies representing 15 percent of all sector roles, despite a 20 percent decrease in vacancies. 

Investment Bank Vacancies Soar While Retail Banks Face Decline Reveals Morgan McKinley

In October 2022, shortly after Credit Suisse launched a major business restructuring and the credit-rating agencies announced they were downgrading the Swiss bank’s debt, adding to the turmoil that was engulfing the then 166-year-old financial institution. One of the immediate steps the bank took in response to the waning confidence in it was to accelerate the sale of the bulk of one of its crown jewels, the so-called securitised products group, a large asset-based lending business that created — or “originated”, in financial jargon — products such as mortgages and auto loans and sold them to investors.



The deal that has spurred Apollo’s plan to remake Wall Street

A leading economist contends a recession is now more likely than not due to the Trump administration’s trade wars, and that the U.S. could suffer the biggest “stagflationary” shock in decades. “We may get recession, we may not, but we are going to get inflation either way,” said Adam Posen, a former official at both the Federal Reserve and the Bank of England, in a speech this week.The influential Posen, now the president of the Peterson Institute for International Economics, put the odds of recession at 65%.

This top U.S. economist puts the chance of a 'stagflationary' recession at 65%

There was nowhere to run this week for investors seeking to escape a market rout that came on like a tidal wave, crashing down Thursday. Tariffs, of course, dominated, and once they were real, as of Wednesday night, the stage was set for a plunge Thursday that’s not been seen in years. Investors fled the digital platforms and the buy now, pay later (BNPL) players — many of them international in scope, and dependent on growth in lending or consumer spending. And within the FinTech IPO Index, which sank more than 11%, not a single name was in the black.

FinTech IPO Index Plunges 11.7% Amid Broad-Based Market Rout

Uncertainty about U.S. policymaking has led to a flight out of the U.S. dollar and Treasurys, with the dollar index weakening more than 9% so far this year, and analysts see more declines. 
The drop in the greenback has led other currencies to appreciate against it, especially safe havens such as the Japanese yen, the Swiss franc as well as the euro. Currency devaluation is likely to be more of an active consideration across emerging markets, particularly in Asia, said Nick Rees, head of macro research at Monex Europe. “Emerging markets face high inflation, debt, and capital flight risks, making devaluation dangerous,” said Wael Makarem, financial markets strategists lead at Exness.

As the dollar falters, the world’s central banks tread a tightrope — devalue their currency or not

China lashed back at President Trump’s tariffs, applying 34% levies on all imported goods from the U.S. Beijing said the levies would come into effect next Thursday, the day after a big part of Trump’s promised tariffs go live. The market selloff continued Friday, with the China retaliation and recession fears pushing investors to sell stocks and hide in the safety of government bonds.
Markets took little comfort from President Trump's willingness to negotiate over the tariffs. The levies announced late Wednesday were deeper and more aggressive than the business world expected. And even as Trump left the door open to making deals, he vowed new tariffs on drugs and microchips.

Dow Opens Sharply Lower, Bonds Rally After China Retaliates Against Trump Tariffs

A leading economist contends a recession is now more likely than not due to the Trump administration’s trade wars, and that the U.S. could suffer the biggest “stagflationary” shock in decades. “We may get recession, we may not, but we are going to get inflation either way,” said Adam Posen, a former official at both the Federal Reserve and the Bank of England, in a speech this week. The influential Posen, now the president of the Peterson Institute for International Economics, put the odds of recession at 65%.

This top U.S. economist puts the chance of a ‘stagflationary’ recession at 65%

JPMorgan believes the US economy will enter a recession in the back half of 2025 as the impact of President Trump tariffs takes hold in the economy. The firm's chief US economist Michael Feroli sees a two-quarter recession occurring in the back half of 2025 as GDP contracts by 1% in the third quarter of the year and by 0.5% in the fourth quarter. For the full-year 2025, Feroli's team projects GDP will fall by 0.3%. "We now expect real GDP [gross domestic product] to contract under the weight of the tariffs," Feroli wrote in a note to clients on Friday night.

JPMorgan becomes the first Wall Street bank to forecast a US recession following Trump's tariffs

The Federal Reserve held its key interest rate unchanged in a range between 4.25%-4.5%, where it has been since December. The post-meeting statement noted the recent market volatility and how that is factoring into the central bank’s policy decisions. “Uncertainty about the economic outlook has increased further,” the statement said.

Fed holds rates steady as it notes rising uncertainty and stagflation risk

Investing.com -- The Federal Reserve may need to implement more aggressive rate cuts as recent data reveals a concerning trend in the labor market, according to Citi analysts in a note Wednesday. The bank said the percentage of individuals finding "jobs hard to get" is increasing, signaling that the rise in unemployment is not merely a sign of a growing labor supply but an indication of weak hiring conditions.  Citi notes that this trend, observed in the Conference Board survey, is reminiscent of the conditions in September 2001, a period when the U.S. economy was already in recession. This situation suggests that a “hard landing” could be imminent, making further aggressive rate cuts from the Fed more likely, says the bank.

Fed may have to cut aggressively as individuals finding jobs hard to get is rising

U.S. Treasuries, the bedrock of the global financial system, were hit by fresh selling pressure on Wednesday in a sign that investors were dumping their safest assets as turmoil unleashed by U.S. tariffs prompts forced selling and a dash for cash. The dollar, also a traditional safe haven, weakened against other major currencies in further evidence that confidence in the world's biggest economy has been shaken.

Global bond rout starting to sound market alarm bells

Gross domestic product fell at a 0.3% annualized pace, largely pushed by a surge in imports ahead of President Donald Trump’s tariffs. Imports soared 41.3%, driven by a 50.9% increase in goods. Imports subtract from GDP, so the contraction in growth may not be viewed as negatively given the potential for the trend to reverse. The report provided cross signals for the Fed. While the negative growth number might push the central bank to consider lowering interest rates, inflation readings could give policymakers pause.

U.S. economy shrank 0.3% in the first quarter as Trump policy uncertainty weighed on businesses

There was plenty of enthusiasm for the fundraising and dealmaking outlook at this year’s SuperReturn conference of private equity professionals, but also an acknowledgment that the IPO market has stalled — in large part due to U.S. volatility. A slowdown in exits has left investors in PE funds unable to realize returns and potentially looking for alternatives. “A lot of PE firms just paid too much” during the era of ultra-low interest rates, one attendee noted, but added that “at some point that has to pass.”

Peak private equity? Sector gets defensive about its ability to generate top returns

Moody's downgraded the U.S. sovereign credit rating on Friday due to concerns about the nation's growing, $36 trillion debt pile, in a move that could complicate President Donald Trump's efforts to cut taxes and send ripples through global markets. Moody's first gave the United States its pristine "Aaa" rating in 1919 and is the last of the three major credit agencies to downgrade it. Friday's cut by one notch to "Aa1" follows a change in 2023 in the agency's outlook on the sovereign due to wider fiscal deficits and higher interest payments.

Moody's cuts America's pristine credit rating, citing rising debt

Berlin-based payment software FinTech Payrails has raised $32 million in new funding.
The company’s Series A round, announced Thursday (June 12), will help the company speed product innovation and expand across Europe, the Middle East and Africa to meet growing demand from larger enterprises. Payrails says it addresses this with a payment operating system specifically designed for enterprises, allowing companies to orchestrate complex payment flows, boost performance, and “abstract the complexity of system integrations.”


Payrails Raises $32 Million to Streamline Enterprise Payments

For two long years private companies have spurned public markets, as rising interest rates dashed lofty valuations and stock prices vacillated. All this has been bad news for Wall Street. In 2021 America’s five largest investment banks together earned an average of $13bn per quarter through their dealmaking and initial-public-offering (IPO) desks. Over the next two years they managed barely half of that.

Wall Street is praying firms will start going public again

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