Investment banks start earnings season with robust profits
January 21, 2025
The US banking sector closed 2024 with strong results as JPMorgan Chase, Wells Fargo, Citigroup and Goldman Sachs reported quarterly results beating Wall Street expectations. These reflect last year's market recovery after previous declines. Optimism persists in expectations for future periods, although some risks remain.
Recently, we have been observing changes that negatively affect a large portion of the investment world. The beginning of April was marked by massive sell-offs, which also affected gold, as traders shifted investments into losing positions. However, the growing tension contributed to a rebound, pushing prices back toward their highs. Copper recorded a decline, impacted by concerns about demand.
On Thursday, the US stock market recorded its sharpest drop since the COVID-19 pandemic in 2020. This development was due to the introduction of reciprocal tariffs by the United States, which were signed by President Donald Trump. While this situation poses some short-term risks for capital markets, it also opens up extremely interesting investment opportunities in the long term. Fundamentally strong companies are now trading at price discounts in the tens of percent, which represents the most favorable purchase conditions in the last five years.
Meta, best known for Facebook, has long focused on virtual and augmented reality (AR/VR), which serve as the driving force behind its Metaverse world. Its latest product is expected to be the more luxurious Ray-Ban Meta smart glasses. The predecessor of these glasses was a market success, and the tech giant is looking to build on that momentum. However, while CEO Mark Zuckerberg believes in the segment's potential and is making massive investments, it remains uncertain whether the new glasses will help reduce the division's record losses.
Inflation, high interest rates and uncertainty. All of this has weakened the venture capital market considerably in recent years, which has undoubtedly been felt by tech startups as well. It seems that after the re-election of Donald Trump, the situation is starting to turn around and the flagship of this recovery is the initial public offering (IPO) of CoreWeave. Despite the fact that the set price was lower than expected, in terms of total volume, this is the largest IPO since 2021. Will the company do well in the long term after the start of trading on the Nasdaq stock exchange?
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