Americans are facing a global pandemic and an economy mired with layoffs and bankruptcies, but at least one institution is profiting during this apparent breakdown…
Americans are facing a global pandemic and an economy mired with layoffs and bankruptcies, but at least one institution is profiting during this apparent breakdown of society: Wall Street.
JPMorgan Chase & Co. — the largest bank in the U. S. — reported its highest quarterly earnings ever this week at $33.8 billion. Goldman Sachs reported its second-highest quarterly revenues ever at $13.3 billion according to NPR. Wells Fargo and Citigroup also raked in billions of dollars in year-to-date revenue.
The reasons behind Wall Street’s success amid the coronavirus pandemic and a slouching economy can largely be attributed to a record-setting revenue from stocks and bonds as well as investment banking fees.
During the initial weeks of the coronavirus outbreak, economic spending came to a virtual halt and entire industries were severely constrained by the fallout, according to Reuters. American stock markets reportedly plunged nearly 10% in March with the biggest single-day loss since the 1987 market crash.
The Federal Reserve then moved to stabilize American markets with a liquidity injection worth roughly $1.5 trillion in short-term loans, Reuters reported.
These efforts to bolster credit markets helped bond trading and allowed institutional investors to hedge against losses, CNBC reported. “The Fed has been able to engineer a huge bounce-back in the markets by injecting trillions of dollars, benefiting investment banks primarily,” Opimas chief executive Octavio Marenzi told CNBC.
JPMorgan saw its markets revenue jump by 79% over last year to a record $9.7 billion, according to the bank’s second quarter report. JPMorgan also reported its revenue from fixed-income markets increased 99% and revenue from equity markets increased 38%, compared to last year.
Goldman Sachs reported its per-share valuation to be $6.26, far above what analysts had predicted, CNBC reported. Goldman Sachs also brought in $2.94 billion from equities and stock trading, the best performance recorded by the company in 11 years according to the bank’s second-quarter report.
