October 15, 2025 • 15 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Federal Reserve Chair Jerome Powell signaled the US central bank is on track to deliver another quarter-point interest-rate cut later this month, even as a government shutdown significantly reduces its read on the economy.
(2) US President Donald Trump said he might stop trade in cooking oil with China, injecting fresh tensions into the relationship between the world’s two largest economies.
(3) JPMorgan Chase CEO Jamie Dimon sounded warnings on the potential for a deterioration in credit quality, a cautionary note that put a damper on the firm’s surge in trading and investment-banking revenue.
(4) ASML’s orders beat analyst expectations in the third quarter, as demand for its chip-making machines was fueled by hundreds of billions of dollars in investment into artificial intelligence infrastructure.
(5) Prime Minister Sebastien Lecornu won the crucial support of the Socialist Party in France’s National Assembly, significantly improving the chances of his new government surviving two no-confidence votes Thursday.
(6) Bank of England Governor Andrew Bailey raised concerns about the UK economy running “under potential” and a softening jobs market, as Chancellor of the Exchequer Rachel Reeves flew to Washington to make her growth pitch to investors.
Podcast Conversation: The Best New Hotel in London Fixes What’s Wrong With Luxury
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:09):
This is the Blue Big Daybreak at podcast Good Morning.
It's Wednesday, the fifteenth of October. I'm Caroline Hepga in
London and.
Speaker 3 (00:16):
I'm Stephen Carolin Brussels. Coming up today, stocks rally on
hopes for more Federal Reserve rate cuts as Jerome Powell
points to a weakening US labor market.
Speaker 2 (00:26):
The United States and China continue to turn up the
temperature on their trade wall.
Speaker 3 (00:31):
Plus a diplomatic entrance into a crowded field, A look
inside the former US embassy in London that's been converted
into a luxury hotel.
Speaker 2 (00:41):
Let's start with a roundup of our top stories.
Speaker 3 (00:43):
Federal Reserve chair Jerome Powell has signaled an interest rate
cut is on the cards for October, breathing fresh life
into markets rocked by trade fears. The US Central Bank
boss pointed several times to the worsening jobs data. When
speaking at the National Association for Business Economics annual meeting.
He hinted policy should move from being more tight to neutral.
Speaker 4 (01:06):
For the last few months, we've been able to maintain
restrictive stance because the lib market was still pretty pretty solid.
I think that the data we got right after the
July meeting showed that which adjusted beck always through May,
showed that the lib market has actually softened pretty considerably
and puts US in a situation where the two resistor
are closer to being in balance.
Speaker 3 (01:28):
Powell added he sees inflation gradually rising, putting the two
sides of the Fed's mandate and conflict. Gold price has
set a new record of healds on US treasuries, falling
to the lowest levels in weeks. Stocks moved higher after
Powell's comments, bouncing back from a dip driven by trade fears.
Speaker 2 (01:46):
President Donald Trump has said that the US could stop
trade in cooking oil with China as tensions between the
world's two largest economies re escalate. Trump cast the move
as retaliation against Beijing for its refusal to buy American soybeans.
Trump called it an economically hostile act that causes difficulty
(02:07):
for US soybean farmers. Just hours earlier, though the President
and US trade representative Jamison Greer had expressed confidence that
friction with China would ease through ongoing negotiations, the IMF's
chief economist, Pierre Olivier Gurinchas warned that the economic consequences
of the trade war are already being felt.
Speaker 5 (02:30):
The tariff shark is here, and it is further dimming
already weak growth prospects.
Speaker 6 (02:36):
This is clear. Even in the US. Growth is revised
down from last year.
Speaker 5 (02:40):
The labor market is weakening, and inflation has been revised up,
and it's persistently above target. Science that the economy has
been hit by a negative supply shock.
Speaker 2 (02:50):
The IMF Chief economists unveiled a dim outlook for growth
in the short and long term. He also pointed to
ongoing concerns about global government borrowing, especially in Europe.
Speaker 3 (03:02):
American banks are reporting massive profits but warning of trouble ahead.
Goldman Sachs, JP Morgan Chase, and City Group all comfortably
beat estimates in their latest earnings reports, with a combined
profit of more than twenty billion dollars, but CEOs from
all three US giants sended alarm bells about markets being
two optimistic. JP Morgan's Jamie Diamond pointed to a pair
(03:24):
of recent bankruptcies in the private credit space.
Speaker 6 (03:28):
I intenda goes up with leeleg I happened in spisure
and says, but when you see one cockroach, they're probably
more you know, and so we should. Everyone should be
four one than this one.
Speaker 3 (03:40):
Diamond's warning about private credit drew a backlash from those
in the space, with Blue al Capital's market Lipschaltz saying
he was fearmongering.
Speaker 2 (03:50):
Now to some breaking news, the Dutch chip equipment maker
ASML has reported bookings for the third quarter of five
point four billion euros, beating estimates. Net sales for the
third quarter came in at seven point five two billion euros,
so slightly below estimates of seven point seventy one billion.
Investors have been focusing on ASML's outlook for next year
(04:13):
for proof that chip equipment makers can catalyze on the
AI boom. As renewed trade tensions between the US and
China add uncertainty. ASML is saying that it will provide
more details on the twenty twenty six outlook in January.
The company's shares have rallied forty five percent in just
over a month to make it Europe's most valuable listed company.
Speaker 6 (04:36):
Francis Prime Minister is TheBus.
Speaker 3 (04:37):
John Loa Karnu has won the backing of the Socialist Party,
boosting his chances of surviving two no confidence votes.
Speaker 6 (04:43):
Tomorrow.
Speaker 3 (04:44):
The Socialists, who hold leverage in the lower house of Parliament,
say they won't move to topple the new government after
Locorneo agreed to suspend President Emmanuel Macron's signature pension reform
that raises the retirement age. The head of the Socialists
in the National Assembly, Barros Val, told lawmakers his party
is taking the gamble to give the country a chance
at a fair budget.
Speaker 7 (05:08):
We are capable of bringing down a government. We have
done so twice. We have only one compass, the interest
of the country, the interest of the French people. I
recognize how much it costs us. We are making a bet,
a risky bet, whose outcome of the future or reveal.
Speaker 3 (05:29):
Boris Fellow, the head of the Socialist party in France's
National Assembly, speaking there. Mary Lapin's far right National Rally,
as well as the far left, have vowed to try
to topple La Cornier's government in no confidence votes tomorrow morning.
Lawmakers have already forced two of La Corney's predecessors, Michelle
Baugnier and France Barberu, to resign over their plans to
rein in France's ballooning budget deficits.
Speaker 6 (05:50):
The largest in the Euro Area.
Speaker 2 (05:53):
Bank of England Governor Andrew Bailey has warned that the
UK economy is performing a little bit under potential. Speaking
at in a fe in Washington, he cautioned against threats
from both above target inflation but also a softening jobs market.
Bailey told an event in Washington that focusing on productivity
growth could lift the UK economy.
Speaker 8 (06:15):
We're putting a lot more empasais on productivity growth really
going forwards, and that is the thing that fell often
they in the post two thousand and eight period. Certainly,
I mean in all countries other than the US, and
of course even in the US it's larry focused on
the tech sector. If you look at the US, the
US absence the tech sector looks.
Speaker 2 (06:30):
Much like the rest of US Andrew Bailey speaking there. Meanwhile,
Chancellor Rachel Reeves is also in Washington, where she'll pitch
the UK's economic stability to investors. On Tuesday, The MF
predicted Britain will suffer the fastest price growth in the
G seven over the next two years and urged the
Bank of England to be quote a very cautious about
(06:52):
further interest rate cuts.
Speaker 3 (06:54):
Those are EOTAB stories on the markets in age of
the Mscish Pacific again Dex up by one point seven percent,
the NIKEA and Tokyo one point nine percent hire, so
a big difference in tone from where we were yesterday.
Eurostocks fifty futures also by one point three percent. SMP
minis on Wall Street are four tenths higher as well.
The Bloomberg Dollars Spot index is two tenths weaker, so
the eurotrading at one sixteen twenty two goal prices one
(07:17):
percent higher again today four thy one hundred and eighty
three dollars are troyads.
Speaker 2 (07:23):
So those are the markets. In a moment. We're going
to bring you more on the market reaction to the
comments from fair chur jerown Power Plus. We'll also unpack
what we have learned from the US Bank earnings. But
before that, something else has caught our rye in the
luxury department Stephen.
Speaker 3 (07:37):
Yeah, indeed, so the new US rather the old US
Embassy that is now a new hotel, the Rosewood Chancery
has opened today. The renovation looks pretty impressive. The inside
of the office building has been torn down to try
and make it into I suppose a more grand space
that The lobby now has one of those crisscross diagree ceilings.
(08:00):
The windows and the stone facade have got careful restoration
as well. One hundred and forty four rooms. Our colleague
Niki Exstein has been to visit it. She does highlight
the spa as big a particular highlight.
Speaker 2 (08:10):
The photo looks amazing of that underground swimming pool, doesn't it.
Speaker 6 (08:14):
But it doesn't come cheap, No, it certainly doesn't. At
a quick look at prices.
Speaker 3 (08:18):
The cheapest night fourteen hundred pounds before the end of
the year now didn't go into next year. But if
you're going you will get to, for example, check out
which you could do with that staying there as well.
The famous eagle, So this was the eagle statue that
used to be.
Speaker 6 (08:33):
Looming over the building as well.
Speaker 3 (08:35):
It's now been moved the giant gilded eagle to the
rooftop bar. And also you may bump into perhaps some
visiting royals as well. Nicki says that during her visit
she spotted some embossed luggage being whizzed past her in
an elevator as well. So it's something to look at
as well. But it's a great read if you want
to check out what the inside of this new addition
to London's luxury hotel scenes look like. We'll put a
(08:57):
link to it in our podcast show notes.
Speaker 2 (08:59):
Absolutely maybe as your next spot when you visit London,
Stephen cal who knows. Let's talk a little bit about
our main story today. Wall Street's are biggest banks on
notching up record hauls for investment banking and trading revenue
for this earning season. The market isn't necessarily rewarding top performers, though.
(09:19):
Let's get a deep dive into this with our reporter
Charlie Wells. What results we have so far Charlie and
how is that translating into share prices?
Speaker 1 (09:27):
Well, the results of an excellent so far, and really
they are a reflection of this deal bonanza that we've
been seeing. In that third quarter, there was one trillion
dollars in global deal volume and we're seeing that translate
to fees for these investment banks. If you look at
Goldman Sacks, they had forty two percent increase in the
quarter in investment banking fees. Solid investment banking numbers coming
(09:48):
in from the other major competitors, and solid numbers on
that trading front as well, these are very much inline
or exceeding expectations, but we're not seeing that in the
share prices. We actually saw Goldman Sacks slip yesterday, We
saw JP Morgan slip yesterday. We saw an uptick for
Wells Fargo, we saw an optic for City Group. But
in a lot of ways, some of this performance maybe
was a reflection of the optimism that we've been seeing.
(10:11):
Maybe a lot of the expectations are kind of baked
into some of these share prices. And also some commentary
that we got some kind of mixed commentary from executives.
Speaker 3 (10:19):
Yeah, warnings really being couched by some of what we
heard from those CEOs as well. What did they say
about where they see the US economy going in the
months ahead.
Speaker 1 (10:29):
Well, there was I would say, kind of cautious optimism,
for lack of a better term. I mean, when you
hear Jamie Dimond talking about cockroaches the potential in the
credit market, as you guys referenced earlier in the program,
I think that gives a sense of some jitters, maybe
some red flags that people are looking out for. And
this was a reflection of other commentary that we saw
from executives. So Mark Mason at City Group, their CFO,
(10:50):
talking about how the consumer is becoming a little bit
more discerning, so kind of being on the lookout for that.
And David Solomon, the CEO of Golden Sacks, had an
interesting point about the aira that we're in right now
and how of course things are going well, but there
could be divergence. So some technologies that do win out
and some that lose.
Speaker 2 (11:07):
Okay, So what do we expect then from today the
other major lenders reporting?
Speaker 1 (11:12):
So we're in what I like to call the eye
of the bank earning storm because we've had a huge
slew yesterday and coming up, We've got more today and
we've got Bank of America coming up. Interesting will be
to look at net interest income because of course we
did have that rate cut just a few weeks ago,
so operating in a different rate environment, net interest income
potentially changing.
Speaker 6 (11:31):
There.
Speaker 1 (11:31):
We've seen a little bit of mixed performance from the
other banks and then Morgan Stanley arch rival to Goldman Sachs. Interestingly,
with Goldman they had a miss on their equities trading revenue.
It came in incredibly solid, but just not quite as
high as a lot of analysts have been expecting, so
it could be a similar picture there.
Speaker 6 (11:48):
Okay, Charlie Wells, thank you very much.
Speaker 2 (11:51):
Stay with us. More from Bloomberg Day baqube coming up
after this. Okay, let's bring you more now than on
what we have heard from the fetcha your own Powell
and how that is being interpreted by investors. Our markets
correspondent Noah Melnda joined us now this morning, No good morning.
Talk us through then how markets have actually been reading
and reacting to Powell's comments, and he was pointing, of
(12:14):
course to the weakness in the US labor market.
Speaker 9 (12:17):
Well, certainly a lot to digest that we've been seeing
in recent days here. I mean, of course, when we
hear Powell, of course, he's the name that everyone likes
to listen to as we're thinking about the details and
parsing what he's saying. That's really the indication of what
things may potentially look like moving forward here. So if
we take a look at what Jerome said yesterday, he
pointed several times to the low pace of hiring and
(12:37):
also noted that it may also weaken further. So you
did see some activity out in the market yesterday at
the closing bell. So we did see stocks and lower
yesterday in New York City, But we also have traders
that are all but surely pricing in a cut at
the end of this month in October. So you really
are seeing people taking away what Jerome Power is saying
(12:57):
as a slight indication here that there could be a
cut ahead.
Speaker 3 (13:02):
So we're still waiting for the September inflation report that'll
come just before the next FED meeting at the end
of the month. How is that likely to interact with
the calculations that policymakers are making ahead of that meeting.
Speaker 9 (13:15):
Well, it's an interesting time period given the fact that
we miss the labor data that always comes at the
first Friday of the month, that of course due to
the government shutdown that has been ongoing here. So it'll
be interesting to see how they utilize this data the
inflation report that we will be getting. The only reason
that we are getting the CPI report is because they
use it towards some of the calculations that they make
(13:35):
when it comes to US social security benefits. So they
are recalling some people to come back and help get
this print out on the docket here. But it's going
to be an interesting time period as the bears and
bulls are kind of pulling back and forth here in
the market, trying to get a good read on what
the economy is looking like with little data to work
with here.
Speaker 2 (13:55):
Yeah, absolutely, and so in terms of the news around
the fed is it's also the interaction with the trade
issue between the US and China that is so important.
Speaker 9 (14:04):
Absolutely, you are seeing so many headlines flying back and forth.
Of course, more recently it's just been the battle between
Trump and China here and just trying to find a
sense of calm. So you are seeing in the market
a lot of people just trying to figure out how
they can capitalize on this moment. We've been talking so
much about the taco trade, which essentially means Trump always
chickens out. So we did see a lot of investors
(14:28):
capitalizing on that moment back in April when we saw
a lot of those tariff headlines here. So it's about
what they can do during this time period and how
you can essentially position yourself in a moment of extreme
uncertainty and volatility. That's clear here in the market.
Speaker 3 (14:44):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London.
Speaker 6 (14:49):
To Wall Street and beyond.
Speaker 2 (14:50):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (14:56):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (15:02):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hepka and.
Speaker 3 (15:11):
I'm Stephen Carol. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak Europe
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:09):
This is the Blue Big Daybreak at podcast Good Morning.
It's Wednesday, the fifteenth of October. I'm Caroline Hepga in
London and.
Speaker 3 (00:16):
I'm Stephen Carolin Brussels. Coming up today, stocks rally on
hopes for more Federal Reserve rate cuts as Jerome Powell
points to a weakening US labor market.
Speaker 2 (00:26):
The United States and China continue to turn up the
temperature on their trade wall.
Speaker 3 (00:31):
Plus a diplomatic entrance into a crowded field, A look
inside the former US embassy in London that's been converted
into a luxury hotel.
Speaker 2 (00:41):
Let's start with a roundup of our top stories.
Speaker 3 (00:43):
Federal Reserve chair Jerome Powell has signaled an interest rate
cut is on the cards for October, breathing fresh life
into markets rocked by trade fears. The US Central Bank
boss pointed several times to the worsening jobs data. When
speaking at the National Association for Business Economics annual meeting.
He hinted policy should move from being more tight to neutral.
Speaker 4 (01:06):
For the last few months, we've been able to maintain
restrictive stance because the lib market was still pretty pretty solid.
I think that the data we got right after the
July meeting showed that which adjusted beck always through May,
showed that the lib market has actually softened pretty considerably
and puts US in a situation where the two resistor
are closer to being in balance.
Speaker 3 (01:28):
Powell added he sees inflation gradually rising, putting the two
sides of the Fed's mandate and conflict. Gold price has
set a new record of healds on US treasuries, falling
to the lowest levels in weeks. Stocks moved higher after
Powell's comments, bouncing back from a dip driven by trade fears.
Speaker 2 (01:46):
President Donald Trump has said that the US could stop
trade in cooking oil with China as tensions between the
world's two largest economies re escalate. Trump cast the move
as retaliation against Beijing for its refusal to buy American soybeans.
Trump called it an economically hostile act that causes difficulty
(02:07):
for US soybean farmers. Just hours earlier, though the President
and US trade representative Jamison Greer had expressed confidence that
friction with China would ease through ongoing negotiations, the IMF's
chief economist, Pierre Olivier Gurinchas warned that the economic consequences
of the trade war are already being felt.
Speaker 5 (02:30):
The tariff shark is here, and it is further dimming
already weak growth prospects.
Speaker 6 (02:36):
This is clear. Even in the US. Growth is revised
down from last year.
Speaker 5 (02:40):
The labor market is weakening, and inflation has been revised up,
and it's persistently above target. Science that the economy has
been hit by a negative supply shock.
Speaker 2 (02:50):
The IMF Chief economists unveiled a dim outlook for growth
in the short and long term. He also pointed to
ongoing concerns about global government borrowing, especially in Europe.
Speaker 3 (03:02):
American banks are reporting massive profits but warning of trouble ahead.
Goldman Sachs, JP Morgan Chase, and City Group all comfortably
beat estimates in their latest earnings reports, with a combined
profit of more than twenty billion dollars, but CEOs from
all three US giants sended alarm bells about markets being
two optimistic. JP Morgan's Jamie Diamond pointed to a pair
(03:24):
of recent bankruptcies in the private credit space.
Speaker 6 (03:28):
I intenda goes up with leeleg I happened in spisure
and says, but when you see one cockroach, they're probably
more you know, and so we should. Everyone should be
four one than this one.
Speaker 3 (03:40):
Diamond's warning about private credit drew a backlash from those
in the space, with Blue al Capital's market Lipschaltz saying
he was fearmongering.
Speaker 2 (03:50):
Now to some breaking news, the Dutch chip equipment maker
ASML has reported bookings for the third quarter of five
point four billion euros, beating estimates. Net sales for the
third quarter came in at seven point five two billion euros,
so slightly below estimates of seven point seventy one billion.
Investors have been focusing on ASML's outlook for next year
(04:13):
for proof that chip equipment makers can catalyze on the
AI boom. As renewed trade tensions between the US and
China add uncertainty. ASML is saying that it will provide
more details on the twenty twenty six outlook in January.
The company's shares have rallied forty five percent in just
over a month to make it Europe's most valuable listed company.
Speaker 6 (04:36):
Francis Prime Minister is TheBus.
Speaker 3 (04:37):
John Loa Karnu has won the backing of the Socialist Party,
boosting his chances of surviving two no confidence votes.
Speaker 6 (04:43):
Tomorrow.
Speaker 3 (04:44):
The Socialists, who hold leverage in the lower house of Parliament,
say they won't move to topple the new government after
Locorneo agreed to suspend President Emmanuel Macron's signature pension reform
that raises the retirement age. The head of the Socialists
in the National Assembly, Barros Val, told lawmakers his party
is taking the gamble to give the country a chance
at a fair budget.
Speaker 7 (05:08):
We are capable of bringing down a government. We have
done so twice. We have only one compass, the interest
of the country, the interest of the French people. I
recognize how much it costs us. We are making a bet,
a risky bet, whose outcome of the future or reveal.
Speaker 3 (05:29):
Boris Fellow, the head of the Socialist party in France's
National Assembly, speaking there. Mary Lapin's far right National Rally,
as well as the far left, have vowed to try
to topple La Cornier's government in no confidence votes tomorrow morning.
Lawmakers have already forced two of La Corney's predecessors, Michelle
Baugnier and France Barberu, to resign over their plans to
rein in France's ballooning budget deficits.
Speaker 6 (05:50):
The largest in the Euro Area.
Speaker 2 (05:53):
Bank of England Governor Andrew Bailey has warned that the
UK economy is performing a little bit under potential. Speaking
at in a fe in Washington, he cautioned against threats
from both above target inflation but also a softening jobs market.
Bailey told an event in Washington that focusing on productivity
growth could lift the UK economy.
Speaker 8 (06:15):
We're putting a lot more empasais on productivity growth really
going forwards, and that is the thing that fell often
they in the post two thousand and eight period. Certainly,
I mean in all countries other than the US, and
of course even in the US it's larry focused on
the tech sector. If you look at the US, the
US absence the tech sector looks.
Speaker 2 (06:30):
Much like the rest of US Andrew Bailey speaking there. Meanwhile,
Chancellor Rachel Reeves is also in Washington, where she'll pitch
the UK's economic stability to investors. On Tuesday, The MF
predicted Britain will suffer the fastest price growth in the
G seven over the next two years and urged the
Bank of England to be quote a very cautious about
(06:52):
further interest rate cuts.
Speaker 3 (06:54):
Those are EOTAB stories on the markets in age of
the Mscish Pacific again Dex up by one point seven percent,
the NIKEA and Tokyo one point nine percent hire, so
a big difference in tone from where we were yesterday.
Eurostocks fifty futures also by one point three percent. SMP
minis on Wall Street are four tenths higher as well.
The Bloomberg Dollars Spot index is two tenths weaker, so
the eurotrading at one sixteen twenty two goal prices one
(07:17):
percent higher again today four thy one hundred and eighty
three dollars are troyads.
Speaker 2 (07:23):
So those are the markets. In a moment. We're going
to bring you more on the market reaction to the
comments from fair chur jerown Power Plus. We'll also unpack
what we have learned from the US Bank earnings. But
before that, something else has caught our rye in the
luxury department Stephen.
Speaker 3 (07:37):
Yeah, indeed, so the new US rather the old US
Embassy that is now a new hotel, the Rosewood Chancery
has opened today. The renovation looks pretty impressive. The inside
of the office building has been torn down to try
and make it into I suppose a more grand space
that The lobby now has one of those crisscross diagree ceilings.
(08:00):
The windows and the stone facade have got careful restoration
as well. One hundred and forty four rooms. Our colleague
Niki Exstein has been to visit it. She does highlight
the spa as big a particular highlight.
Speaker 2 (08:10):
The photo looks amazing of that underground swimming pool, doesn't it.
Speaker 6 (08:14):
But it doesn't come cheap, No, it certainly doesn't. At
a quick look at prices.
Speaker 3 (08:18):
The cheapest night fourteen hundred pounds before the end of
the year now didn't go into next year. But if
you're going you will get to, for example, check out
which you could do with that staying there as well.
The famous eagle, So this was the eagle statue that
used to be.
Speaker 6 (08:33):
Looming over the building as well.
Speaker 3 (08:35):
It's now been moved the giant gilded eagle to the
rooftop bar. And also you may bump into perhaps some
visiting royals as well. Nicki says that during her visit
she spotted some embossed luggage being whizzed past her in
an elevator as well. So it's something to look at
as well. But it's a great read if you want
to check out what the inside of this new addition
to London's luxury hotel scenes look like. We'll put a
(08:57):
link to it in our podcast show notes.
Speaker 2 (08:59):
Absolutely maybe as your next spot when you visit London,
Stephen cal who knows. Let's talk a little bit about
our main story today. Wall Street's are biggest banks on
notching up record hauls for investment banking and trading revenue
for this earning season. The market isn't necessarily rewarding top performers, though.
(09:19):
Let's get a deep dive into this with our reporter
Charlie Wells. What results we have so far Charlie and
how is that translating into share prices?
Speaker 1 (09:27):
Well, the results of an excellent so far, and really
they are a reflection of this deal bonanza that we've
been seeing. In that third quarter, there was one trillion
dollars in global deal volume and we're seeing that translate
to fees for these investment banks. If you look at
Goldman Sacks, they had forty two percent increase in the
quarter in investment banking fees. Solid investment banking numbers coming
(09:48):
in from the other major competitors, and solid numbers on
that trading front as well, these are very much inline
or exceeding expectations, but we're not seeing that in the
share prices. We actually saw Goldman Sacks slip yesterday, We
saw JP Morgan slip yesterday. We saw an uptick for
Wells Fargo, we saw an optic for City Group. But
in a lot of ways, some of this performance maybe
was a reflection of the optimism that we've been seeing.
(10:11):
Maybe a lot of the expectations are kind of baked
into some of these share prices. And also some commentary
that we got some kind of mixed commentary from executives.
Speaker 3 (10:19):
Yeah, warnings really being couched by some of what we
heard from those CEOs as well. What did they say
about where they see the US economy going in the
months ahead.
Speaker 1 (10:29):
Well, there was I would say, kind of cautious optimism,
for lack of a better term. I mean, when you
hear Jamie Dimond talking about cockroaches the potential in the
credit market, as you guys referenced earlier in the program,
I think that gives a sense of some jitters, maybe
some red flags that people are looking out for. And
this was a reflection of other commentary that we saw
from executives. So Mark Mason at City Group, their CFO,
(10:50):
talking about how the consumer is becoming a little bit
more discerning, so kind of being on the lookout for that.
And David Solomon, the CEO of Golden Sacks, had an
interesting point about the aira that we're in right now
and how of course things are going well, but there
could be divergence. So some technologies that do win out
and some that lose.
Speaker 2 (11:07):
Okay, So what do we expect then from today the
other major lenders reporting?
Speaker 1 (11:12):
So we're in what I like to call the eye
of the bank earning storm because we've had a huge
slew yesterday and coming up, We've got more today and
we've got Bank of America coming up. Interesting will be
to look at net interest income because of course we
did have that rate cut just a few weeks ago,
so operating in a different rate environment, net interest income
potentially changing.
Speaker 6 (11:31):
There.
Speaker 1 (11:31):
We've seen a little bit of mixed performance from the
other banks and then Morgan Stanley arch rival to Goldman Sachs. Interestingly,
with Goldman they had a miss on their equities trading revenue.
It came in incredibly solid, but just not quite as
high as a lot of analysts have been expecting, so
it could be a similar picture there.
Speaker 6 (11:48):
Okay, Charlie Wells, thank you very much.
Speaker 2 (11:51):
Stay with us. More from Bloomberg Day baqube coming up
after this. Okay, let's bring you more now than on
what we have heard from the fetcha your own Powell
and how that is being interpreted by investors. Our markets
correspondent Noah Melnda joined us now this morning, No good morning.
Talk us through then how markets have actually been reading
and reacting to Powell's comments, and he was pointing, of
(12:14):
course to the weakness in the US labor market.
Speaker 9 (12:17):
Well, certainly a lot to digest that we've been seeing
in recent days here. I mean, of course, when we
hear Powell, of course, he's the name that everyone likes
to listen to as we're thinking about the details and
parsing what he's saying. That's really the indication of what
things may potentially look like moving forward here. So if
we take a look at what Jerome said yesterday, he
pointed several times to the low pace of hiring and
(12:37):
also noted that it may also weaken further. So you
did see some activity out in the market yesterday at
the closing bell. So we did see stocks and lower
yesterday in New York City, But we also have traders
that are all but surely pricing in a cut at
the end of this month in October. So you really
are seeing people taking away what Jerome Power is saying
(12:57):
as a slight indication here that there could be a
cut ahead.
Speaker 3 (13:02):
So we're still waiting for the September inflation report that'll
come just before the next FED meeting at the end
of the month. How is that likely to interact with
the calculations that policymakers are making ahead of that meeting.
Speaker 9 (13:15):
Well, it's an interesting time period given the fact that
we miss the labor data that always comes at the
first Friday of the month, that of course due to
the government shutdown that has been ongoing here. So it'll
be interesting to see how they utilize this data the
inflation report that we will be getting. The only reason
that we are getting the CPI report is because they
use it towards some of the calculations that they make
(13:35):
when it comes to US social security benefits. So they
are recalling some people to come back and help get
this print out on the docket here. But it's going
to be an interesting time period as the bears and
bulls are kind of pulling back and forth here in
the market, trying to get a good read on what
the economy is looking like with little data to work
with here.
Speaker 2 (13:55):
Yeah, absolutely, and so in terms of the news around
the fed is it's also the interaction with the trade
issue between the US and China that is so important.
Speaker 9 (14:04):
Absolutely, you are seeing so many headlines flying back and forth.
Of course, more recently it's just been the battle between
Trump and China here and just trying to find a
sense of calm. So you are seeing in the market
a lot of people just trying to figure out how
they can capitalize on this moment. We've been talking so
much about the taco trade, which essentially means Trump always
chickens out. So we did see a lot of investors
(14:28):
capitalizing on that moment back in April when we saw
a lot of those tariff headlines here. So it's about
what they can do during this time period and how
you can essentially position yourself in a moment of extreme
uncertainty and volatility. That's clear here in the market.
Speaker 3 (14:44):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London.
Speaker 6 (14:49):
To Wall Street and beyond.
Speaker 2 (14:50):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (14:56):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (15:02):
Our flagship New York station, is also available on your
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I'm Stephen Carol. Join us again tomorrow morning for all
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