00:00 Speaker A
results are expected to look very strong. So really the expectation is how sustainable, how durable um this kind of earnings power that we’ve seen from the big banks is uh going forward. I mean, I think
00:23 Speaker A
a thing you hear about their Wall Street operations, investment banking and trading is that they’re firing on all cylinders. That’s not always typical because investment banking typically doesn’t work as well in volatile markets and trading works better in volatile markets. It’s not always like a solid rule, but that’s generally how people have thought about it. But for the last year or so, both have been doing really well. And obviously we have this huge AI financing boom that has been going on in in bond underwriting, IPOs now and corporate M&A has been very hot.
00:54 Speaker B
Mhm.
01:05 Speaker A
Along with that too, if you look at the consumer, consumer spending has um been very robust. If you look at Bank of America’s data, um just through this year, it’s actually been accelerating. and it seems like for all of what we know that’s that theme’s going to continue. Um so what executives are going to need to do starting tomorrow will be to convince investors that this is going to continue on through the end of the year.
01:29 Speaker A
If you look at this quarter, the results are going, at least in equity capital markets, a lot of it’s going to have to do with uh the SpaceX IPO and also Google’s massive follow on raise. Those are huge deals that have been propping up the the MNA and IPO and bond market.
02:08 Speaker B
Mhm.
02:09 Speaker A
So just to see um, you know, a couple of those, it’s hard to believe you’re going to continue to see more of them. Obviously, um Anthropic and maybe Open AI are going public uh late later this year or at least expected to. So there are those um coming up in the future, but we we we really can’t expect this to last very long, you would think. Um, but analysts analysts are analysts kind of have a door open for what they think is an AI driven, multi-year super cycle. I always get a little hesitant when I hear about super cycle in banking.
02:51 Speaker B
Yeah.
02:52 Speaker A
Um but that’s the expectation and we have to see how much more room um investors sort of have for that.
03:00 Speaker A
I think always the biggest worry is credit, but that’s not one that people where people see an issue at this point. It’s sort of a never say never situation in credit. But compared to last quarter where there’s a lot of concern about bank’s exposure to private credit lenders, it doesn’t really seem like that’s
03:22 Speaker B
That has really died down. Yeah. Yeah.
03:24 Speaker A
Yeah. And I think it mostly has to do with big banks being pretty clear about their exposure and about how much it it it sort of accounts for all of their loans.
