As this article from Business Insider points out US banks are having a horrible year across the board. It is typically a very concerning sign for the markets and economy when the banks struggle. When we see the banks slide I expect volatility in many different sectors to increase, since banks can benefit (short term) from wider moves in markets…
Click here to visit the original posting page.
…
Wall Street banks are having a terrible year.
Total revenue across the top 10 banks was down in the first six months of the year, according to the research firm Coalition. The total of $79.3 billion was 15% less than the $93.3 billion in the first half of 2015 and 23% less than the $102.4 billion in the first half of 2011. Barely a single business line was spared.
From fixed income, currencies and commodities (FICC) to equities to traditional investment banking, revenues dropped sharply. Let’s take a look:
The headline numbers are grim: FICC revenue fell 11%, equities revenue fell 18%, and fees from traditional investment-banking activities like advising on acquisitions and equity and debt deals fell 20%.
Almost every single business unit within FICC took a hit. Banks made less money trading: corporate bonds; currencies; commodities; emerging markets; and securitized assets.
There was a similar story in equities. Stock trading, equity derivatives, and prime services revenues fell.
The investment bankers weren’t spared, either. M&A revenue dropped, albeit from a very strong 2015, while equity capital markets revenue tanked. Debt capital markets revenue also dropped.
If the banks aren’t strong everyone is in trouble not just wall street but main street as well.