Bank Earnings Face Consumer Strain Despite Strong M&A and Trading Activity
Major banks including JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup are poised to report robust earnings fueled by a resurgence in mergers, trading, and IPO activity. Yet, Raymond James analyst Michael ROSE warns of emerging risks—rising loan delinquencies and corporate bankruptcies threaten to dampen results.
"The consumer appears broadly healthy, but cracks are forming," Rose notes. Auto and student loan delinquencies bear watching. While not yet alarming, these trends could escalate into headwinds for financial institutions.
External pressures compound the challenge. A potential government shutdown looms as a disruptor to capital markets activity. Meanwhile, inflation continues outpacing wage growth, squeezing lower-income households. GoFundMe CEO Tim Cadogan reports a stark indicator: crowdfunding for basic necessities like rent and utilities has surged threefold as affordability crises intensify globally.
