Major US banks are booming

“While there is some talk of a slowdown, I’ll just say that the US economy is now as big as … a pre-epidemic,” Bank of America CEO Brian Moinian told analysts on Thursday.

Wall Street is encouraging the recent earnings of America’s top creditors, who have released the billions of dollars they used to spend during the coronavirus crisis to cover possible bad loans. The Dow was up 1.6% on Thursday and the S&P 500 was up 1.7%. Shares of Bank of America rose 4.5%, while KBW Bank Index, which tracks the sector, rose 1.3%.

So what exactly do banks see that make them feel confident about the future?

S axes. Citi reports that credit card costs have risen by 20% year-on-year and are now “much higher than in 2019”. Wells Fargo also found that the weekly cost of debit cards increased every week compared to the previous week compared to 2019, as customers again had fun at entertainment restaurants.

“We continue to see that our customers have significant liquidity and consumers continue to spend,” said Charles Scharf, CEO of Wells Fargo.

There may be some change in spending patterns as support for the Covid-era government dissipates, officials say. But they believe that power will be maintained.

Supply chains. The accumulated supply chains are so disturbing that the Biden administration has announced a “90-day sprint” to address the issue. But banks do not see it as a game changer.

“I doubt we will talk about the supply chain in a year. I just think we focus too much on that, ”said Jam Amy Dimon, CEO of JPMorgan Chase. “It simply came to our notice then. That does not detract from a fairly good economy. “

Transactions. Banks just do not feel good because costs are rising on Main Street. They are also cashing in on Wall Street, which has seen a huge boom in transactions.

JPMorgan reported that its investment banking income increased by 45% as fees were charged for giving companies advice on mergers and acquisitions. Morgan Stanley saw that the income of investment banks increased by 67% year-on-year. Citi had its best quarter of mergers and acquisitions in a decade.

Does that mean everything is pink? Of course no: Citi CEO Jane Ein Fraser said the company was “paying close attention” to three things. There is inflation, including the impact of labor shortages, energy shortages, as well as the slowdown in China, and what is happening with the US debt ceiling negotiations.

But the big picture is that lenders are making tons of money so far, and they expect the trend to continue.

Shares of Virgin Galactic are in the crater

Shares of Virgin Galactic eased after the company announced it was postponing the space tourism dream of its wealthy customers.

The latest. The company, founded by billionaire Richard Branson, has announced that it is postponing the start of full-time commercial service until the fourth quarter of next year. It was aimed at the end of the third quarter.

Shares in the market fell by 18% on Friday.

Virgin Galactic said its immediate priority was an “enhancement program” designed to upgrade its VSS Unity rocket mother ship և from which it launches.

But that means customers who have paid for six jobs will have to wait a little longer. Virgin Galactic has sold about 600 tickets for future flights.

The company’s shares were already under pressure. After earning more than $ 60 in February, they finished with $ 24.06 on Thursday.

On the radars. Space tourism is increasingly dividing society. In an interview with the BBC on Thursday, Prince William criticized billionaires who focus on rockets, saying they should invest more time and money to save the Earth.

“Star Trek” actor William Shatner, who exploded one of the rockets of the founder of Amazon Bezos FFF Bezos earlier this week, opened fire on the British king, who, he said, “made a mistake.”

“The idea here is not to go, yes, look at me. “I’m in space,” many told Entertainment Tonight. Instead, the guidelines represent a “childish step” toward moving polluting industries into space.

New paper suggests S&P 500 membership could be ‘sold’

Companies are eager to join the S&P 500, for good reason.

By becoming a member of the most popular US stock index, companies are helping to attract significant investments from market players who might otherwise not have bought shares. It is also an authoritative differentiator. The final members of the club must prove that they have “succeeded”.

But are the index spots for sale? This is an explosive question posed by the National Bureau of Economic Research recently published by researchers at the National University of Australia and Columbia University.

The paper, whose findings have not been revised, claims that companies tend to gain S&P ratings when there are openings in the leading index. It turned out that the purchases “seem to improve their chances of entering the index.”

S&P Global criticized the newspaper in a statement as “flawed”.

“The S&P Dow Jones Indices և S&P Global Ratings are separate companies with policies ակարգ procedures to ensure that they operate independently of each other,” the company said. “Managing our index separates analytical trading to protect the integrity of our indexes.”

Step back. Aside from its claims, the newspaper reminds that the process of joining the S&P 500 involves great discretion. To be eligible, the companies must be US companies with a market capitalization of at least $ 11.8 billion and record four consecutive positive returns. However, the final decision rests with the index committee և their calls have major repercussions on cash flow.

Next:

Goldman Sachs: (GS:), JB Hunt, PNC: (PNC:) and Truist: (TFC:) report results before US markets open.

He! US Retail Sales for September ET 8 p.m. On the 30th.

Next week. The revenue season will soon be over with results Johnson & Johnson: (JNJ:), Procter & Gamble: (PG:), Netflix: (NFLX:), United Airlines: (UAL:), IBM: (IBM:) and Tesla (TSLA:).

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