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Major US banks said that Donald Trump's return to the White House could lead to a major success on Wall Street in 2025, but concerns remain about inflationary policies and global conflict.
Top executives from many of Wall Street's largest companies Banks On Wednesday it was shown Optimistic expectations This year, especially for their investment banking business, whose revenues have been rising in recent months.
The cautiously optimistic sentiment highlights how many US executives are hoping the president-elect's pledges to boost growth and cut regulations will be a boon for their businesses, even as they worry about the sometimes erratic policy-making process.
CEO of Goldman Sachs David Solomon On Wednesday: “There has been a tangible shift in CEO confidence, especially after the US election results. In addition, there is. . . Overall increased appetite for deals is supported by an improved regulatory backdrop.”
“The combination of these conditions should stimulate more activity in 2025,” he added.
“The incoming Trump administration has made it clear that they are pro-growth,” added Robin Vince, CEO of the Bank of New York. “If that pro-growth translates into activity, which we obviously hope for, then we think that will be a good final backdrop.”
The enthusiasm extends from mergers and acquisitions to debt issuance and plans to take more companies to public markets, bankers said.
Jeremy Barnum, chief financial officer at JP Morgan, said the United States is experiencing a moment of “animal desire.” . . We are happy to see more optimism among senior officials in the country and globally in some pockets.
Banks' expectations for 2025 were strong after they reported big increases in fourth-quarter profits from last year: JP Morgan's net profit rose 50 percent to $14 billion, while Goldman Sachs' net profit doubled to $4.1 billion. Citi swung to a profit of $2.9 billion from a loss of $1.8 billion in the fourth quarter of 2023.
Citi shares jumped 7 percent after publishing its results, with Goldman rising 5 percent and JP Morgan more than 1 percent.
Banks benefited from a sharp rise in stock trading before and after Trump won the November election. His win sent stocks higher, although markets gave up a large share of those gains.
Investment banking services It has also excelled at companies exploiting upbeat market conditions to raise money through stock and bond sales. A rebound in M&A activity has also provided a boost.
Even Wells Fargo, which generates the vast majority of its revenue from consumer and corporate businesses, announced a big push into investment banking.
Large payments to replenish the Federal Deposit Insurance Fund, which led to lower earnings in the fourth quarter of 2023, also weighed on the year-over-year comparison in overall net earnings.
Despite the strong performance, major funders also warned that enthusiasm could be dampened by a geopolitical crisis or economic shock caused by rapid shifts in government policy under Trump, who often took unexpected paths during his first term in office from 2017 to 2021.
Jamie Dimon, CEO of JP Morgan, warned that “geopolitical conditions remain the most dangerous and complex since World War II.”
Not only has Trump promised mass deportations of illegal immigrants and heavy tariffs, but he has also considered seizing Greenland and the Panama Canal, among other things.
“It's a complicated world and I think we all have to be on our toes and prepare for the unexpected,” Solomon said. “There is uncertainty when you look broadly across immigration policy, trade policy, tax policy, energy policy… there are different outcomes.”
They warned that a return to high inflation rates could disturb markets, pressure corporate profits and dry up deal-making.
“I think the economy is in very good shape,” BlackRock CEO Larry Fink told CNBC. However, is it in very good condition? Will we start to see higher inflationary pressures? “We'll see.”
The world's largest money manager reported that it attracted record new funds for the second half of 2024.
Additional reporting by Zahra Mounir in New York and Harriet Agnew in London
