JP Morgan kicked off Q3 earnings season on Friday, beating on both EPS and revenue expectations.
We'll hear from more of the big banks tomorrow.
Once again, the expectations bar for S&P 500 earnings growth has been set low by Wall Street. The estimate for the quarter has been revised down to just 4.1%.
And this comes in a quarter that the Atlanta Fed projects the economy to have grown at 3.2% — and in a quarter that ended with what is considered to be a hot jobs report. So once again, we head into earnings season with a setup for positive surprises.
As for the banks, remember last week we talked about Jamie Dimon's comment surrounding AI and the "backlog for IPOs."
And we looked at the parallels between the current environment and the late 90s boom, both of which had the driver of a technology revolution.
If history is our guide, we should expect a coming boom in IPOs.
Let's revisit how the late 90s IPO boom influenced the Wall Street kings of underwriting (with emphasis on the performance from the first Fed rate cut up to the March 2000 stock market peak).
Here's JP Morgan …
Citibank …
Morgan Stanley …
And no one was responsible for more IPO underwriting volume in that era than Goldman Sachs. And they went public in 1999, in the height of the frenzy. The stock went up 60% in 10 months, before the stock market topped in March of 2000.
