Wall Street's Shifting Outlook: From 'Green Shoots' to Looming Layoffs
Wall Street banks reported a 2% drop in investment banking fees in the third quarter, dispelling hopes of a surge in dealmaking profits. Morgan Stanley experienced the biggest drop with a 27% fall in investment-banking revenue, leading to a nearly 7% decline in its stock. While Citigroup and Bank of America reported year-over-year gains, even they expressed caution and uncertainty about the future. The banks are now predicting that sustained gains in deal activity may not materialize until 2024. They are waiting for the Federal Reserve to signal the end of interest rate hikes before confidence returns for their corporate customers.