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    Wall Street banks had a great quarter, and the boom times are just starting

    American investment banks disclosed a record-smashing quarter, helped by surging trading activity around the U.S. election and a pickup in investment banking deal flow.
    JPMorgan Chase, Goldman Sachs and Morgan Stanley easily topped estimates for the fourth quarter.
    And deal activity is only picking up steam, according to bank executives.

    Jonathan Gray, president and chief operating officer of Blackstone Inc., from left, Ron O’Hanley, chief executive officer of State Street Corp., Ted Pick, chief executive officer of Morgan Stanley, Marc Rowan, chief executive officer of Apollo Global Management LLC, and David Solomon, chief executive officer of Goldman Sachs Group Inc., during the Global Financial Leaders’ Investment Summit in Hong Kong, China, on Tuesday, Nov. 19, 2024.
    Paul Yeung | Bloomberg | Getty Images

    American investment banks just disclosed a record-smashing quarter, helped by surging trading activity around the U.S. election and a pickup in investment banking deal flow.
    Traders at JPMorgan Chase, for instance, have never had a better fourth quarter after seeing revenue surge 21% to $7 billion, while Goldman Sachs’ equities business generated $13.4 billion for the full year — also a record.

    For Wall Street, it was a welcome return to the type of environment craved by traders and bankers after a muted period when the Federal Reserve was raising rates as it grappled with inflation. Boosted by a Fed in easing mode and the election of Donald Trump in November, banks including JPMorgan, Goldman and Morgan Stanley easily topped expectations for the quarter.
    But the grand machinery keeping Wall Street moving is just picking up steam. That’s because, deterred by regulatory uncertainty and higher borrowing costs, U.S. corporations have mostly sat on the sidelines in recent years when it came to buying competitors or selling themselves.
    That’s about to change, according to Morgan Stanley CEO Ted Pick. Buoyed by confidence in the business environment, including hopes for lower corporate taxes and smoother approvals on mergers, banks are seeing growing backlogs of merger deals, according to Pick and Goldman CEO David Solomon.
    Morgan Stanley’s deal pipeline is “the strongest it’s been in 5 to 10 years, maybe even longer,” Pick said Thursday.

    ‘Pounding the table’

    Capital markets activity including debt and equity issuance had already begun recovering last year, rising 25% from the depressed levels of 2023, per Dealogic figures. But without normal levels of merger activity, the entire Wall Street ecosystem has been missing a key driver of activity.

    Multibillion-dollar acquisitions sit at “the top of the waterfall” for investment banks like Morgan Stanley, Pick explained, because they are high-margin transactions that “have a multiplier effect through the whole organization.”
    That’s because they create the need for other types of transactions, like massive loans, credit facilities or stock issuance, while generating millions of dollars in wealth for executives that needs to be managed professionally.
    “The last piece is what we’ve been waiting for, which are M&A tickets,” Pick said, referring to the contracts governing merger deals. “We are excited about pushing that through to the rest of the investment bank.”
    Results from Goldman on Wednesday spurred veteran Morgan Stanley banking analyst Betsy Graseck to raise her 2025 forecast for the bank’s earnings by 9%.
    “We’re pounding the table on the capital markets rebound theme,” Graseck said in a note. “Expect more EPS beats throughout this year as the industry trading wallet grows and investment banking activity rebounds.”

    IPO revival?

    Another engine of value creation for Wall Street that has been slow in recent years is the IPO market — which is also set to pick up, Solomon told an audience of tech investors and employees Wednesday.
    “There has been a meaningful shift in CEO confidence,” Solomon said earlier that day. “There is a significant backlog from sponsors and an overall increased appetite for deal-making supported by an improving regulatory backdrop.”
    After a lean few years, it should make for a profitable time for Wall Street’s dealmakers and traders.
    WATCH: Goldman Sachs tops estimates More

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    Fed Governor Waller sees potential for multiple interest rate cuts in 2025

    Fed Governor Christopher Waller told CNBC on Thursday that the central bank could lower interest rates multiple times this year if inflation eases as he is expecting.
    “As long as the data comes in good on inflation or continues on that path, then I can certainly see rate cuts happening sooner than maybe the markets are pricing in,” he said.
    Traders increased their bets for a slightly more aggressive pace of rate cuts following Waller’s remarks.

    Federal Reserve Governor Christopher Waller said Thursday that the central bank could lower interest rates multiple times this year if inflation eases as he is expecting.
    In a CNBC interview, the policymaker said he expects the first cut could come in the first half of the year, with others to follow so long as economic data on prices and unemployment cooperate.

    “As long as the data comes in good on inflation or continues on that path, then I can certainly see rate cuts happening sooner than maybe the markets are pricing in,” Waller said during a “Squawk on the Street” interview with Sara Eisen.
    Asked how many that could entail, he responded, “That’s all going to be driven by the data. I mean, if we make a lot of progress, you could do more,” which he said could mean three or four, assuming quarter percentage point increments.
    “If the data doesn’t cooperate, then you’re going to be back to two and going maybe even one, if we just get a lot of sticky inflation,” he said.
    Traders increased their bets for a slightly more aggressive pace of rate cuts following Waller’s remarks. Market-implied odds for a May move rose to about 50%, though June appeared to be the better bet, according to CME Group data. Expectations for a second reduction by the end of the year climbed to about 55%, or about 10 percentage points higher than before he spoke.
    At the core of Waller’s hopes for easing is a belief that inflation will ease further as the year goes on, despite several months’ of data showing stickiness in some key prices. The consumer price index slowed to a 3.2% core reading, excluding food and energy, for December, down 0.1 percentage point from the prior month though still well above the Fed’s 2% target.

    “Right now, I think inflation is going to continue to come in towards our target. The year over year, stickiness that we saw in 2024 I think will start to dissipate,” he said. “So I may be a little more optimistic about inflation coming down than the rest of my colleagues, and that’s what’s driving my outlook for the path for policy.”
    At the December meeting, Federal Open Market Committee members penciled in two cuts for 2025, though commentary after the meeting has pointed toward a cautious and patient approach.
    The FOMC next meets Jan. 28-29, with markets pricing in almost no chance of a move.
    “Well, January, we need to kind of see what’s going to happen. … We’re in really no rush to do things,” Waller said.

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    Spirit Airlines cuts 200 jobs in bankruptcy cost-cutting scramble

    Spirit’s job cuts span several airline departments.
    The budget carrier filed for Chapter 11 bankruptcy protection in November.
    The airline said it expects to exit bankruptcy this quarter.

    A Spirit Airlines plane at New York’s LaGuardia Airport
    Leslie Josephs/CNBC

    Spirit Airlines is cutting about 200 jobs across the company as the struggling budget carrier seeks to reduce costs after it filed for Chapter 11 bankruptcy protection in November.
    “These decisions were not made lightly, as we know they impact professional and personal lives,” CEO Ted Christie wrote in a staff memo, which was seen by CNBC. “As you all know, we’re facing significant challenges with our business, which is why we’ve been focused on taking actions to optimize our organization and create more efficiencies. The bottom line is, we need to run a smaller airline and get back on better financial footing.”

    Read more CNBC airline news

    Spirit had about 13,000 employees at the time of its bankruptcy filing, about 84% of them represented by unions, according to a court filing. The job cuts are to nonunion positions and are part of the company’s plan to cut $80 million in costs.
    “With all of those actions, coupled with this week’s reductions to our workforce, we’ve now reached the $80 million cost-savings target,” Christie wrote.
    The Dania Beach, Florida-based airline had previously furloughed hundreds of pilots and offered flight attendants extended voluntary leaves of absence to try to reduce costs. It has also shrunk its network and reached deals to sell some of its Airbus jetliner fleet to raise cash.

    Spirit has struggled since its planned merger with JetBlue was blocked by a federal court on antitrust grounds a year ago, adding to struggles that also included a Pratt & Whitney engine recall and a surge in labor costs after the pandemic.
    Christie said the carrier is still on track to exit bankruptcy this quarter.

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    Investors pitch new international basketball league that would offer players equity

    Maverick Carter, LeBron James’ business partner, is advising a group of investors who are trying to raise $5 billion to form a new international basketball league, people familiar with the matter said.
    The league would consist of both men’s and women’s teams and plans to play in eight markets.
    Players will be offered an equity stake in the league, people familiar with the matter said.

    Maverick Carter, co-founder and chief executive officer of The SpringHill Company, during the USC Next Level Sports Conference in Los Angeles, California, US, on Thursday, Oct. 17, 2024. 
    Kyle Grillot | Bloomberg | Getty Images

    A group of high powered investors want to raise billions to form a new international basketball league, according to people familiar with the matter.
    The new organization would offer players equity, those people said.

    The investors aim to raise $5 billion for the league, which could serve as a rival to the NBA if it can offer big-money deals to players, similar to how LIV Golf lured away PGA Tour players.
    It’s unclear which players the league would target or when it could start.
    Maverick Carter, LeBron James’ longtime friend and business partner, is advising a group that includes investment firm SC Holdings’ Jason Stein and Daniel Haimovic, Skype co-founder Geoff Prentice and former Facebook executive Grady Burnett.
    A representative for James said he is not involved in the effort and declined to comment on whether the Los Angeles Lakers star has been approached to participate.
    The group is working with UBS and Evercore to help raise the money, which is expected to come from a mix of sovereign wealth funds, institutional investors and wealthy individuals, the people said.

    The unnamed league is expected to play games in eight cities around the world, spending two weeks in each city, following a model similar to Formula 1. The league will consist of 12 teams — six men’s and six women’s teams.
    Singapore is one of the markets where games will take place, the people said. It’s unclear what the other seven markets will be.
    Representatives for the NBA didn’t immediately respond to a request for comment.
    But a source familiar said they were not aware of the plan for the league before reports about it emerged Wednesday. Bloomberg first reported the news.
    In recent years, the NBA has ramped up its international presence, with a league in Africa and games abroad ranging from China to the UAE, Mexico City and Paris. The league also had a record-tying 125 international players tip off in the 2024 season. More

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    LIV Golf announces multiyear media rights deal with Fox Sports

    LIV Golf inked a media rights deal with Fox Sports to broadcast its League competition.
    Fox and its family of networks will begin airing LIV tournaments in February.
    The announcement comes just a day after LIV named Scott O’Neil as its new CEO.

    A general view of the 18th green the LIV Golf logo and Club 54 during the 3rd round of the LIV Golf Invitational Series Bedminster on July 31, 2022 at Trump National Golf Club in Bedminster, New Jersey.
    Rich Graessle | Icon Sportswire | Getty Images

    LIV Golf announced Thursday a multiyear media rights agreement with Fox Sports to broadcast the pro golf tour to U.S. viewers, starting in February.
    The tour’s 14-tournament season will air on Fox, FS1 and other Fox networks, and will also stream on the Fox Sports and LIV Golf+ apps. The LIV Golf League features 13 teams of four golfers each, including two-time major champions Jon Rahm and Bryson DeChambeau.

    The news comes a day after the Saudi-financed sports organization named Scott O’Neil, the former CEO of Merlin Entertainments and Harris Blitzer Sports & Entertainment, as its new CEO. He replaces Greg Norman, the tour’s first commissioner and CEO, who will remain informally involved with LIV.
    “We are thrilled to partner with FOX Sports, one of the preeminent broadcast networks in the world,” O’Neil said in a news release. “LIV Golf is getting bigger and bolder, and this relationship signals the next phase of growth as our League joins the company of the nation’s premier sports leagues and conferences.”
    LIV Golf was originally founded in 2021 as a competitor to the PGA Tour and is backed by Saudi Arabia’s Public Investment Fund. It quickly poached prominent golfers, including Phil Mickelson and Dustin Johnson.
    In June 2023, the PGA Tour and LIV Golf reached an agreement to merge, but the leagues have yet to strike a deal after more than 18 months of negotiations.
    LIV Golf was previously broadcasted on the Nexstar Media Group-operated CW Network. The upstart golf league struggled to bring in big audiences on The CW.

    Fewer than 90,000 fans tuned into the league’s individual championship in September, a fraction of the audience it had when the league kicked off. It’s expected that the move to Fox could help broaden its reach.
    This season, LIV will host tournaments in nine different countries, beginning in Riyadh, Saudi Arabia on February 6 and concluding with the team championship in the Detroit suburbs in late August.
    — CNBC’s Jessica Golden contributed to this report. More

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    EV, hybrid sales reached a record 20% of U.S. vehicle sales in 2024

    Auto data firm Motor Intelligence reports more than 3.2 million “electrified” vehicles were sold last year.
    That includes 1.9 million hybrid vehicles, including plug-in models, and 1.3 million all-electric models.
    Tesla continued to dominate sales of pure EVs but Cox Automotive estimated its annual sales fell and its market share dropped to about 49%.

    New Tesla cars are displayed at a Tesla dealership on December 20, 2024 in Corte Madera, California. 
    Justin Sullivan | Getty Images

    DETROIT — Sales of all-electric vehicles and hybrid models reached 20% of new car and truck sales in the U.S. for the first time last year — marking a landmark year for “green” vehicles but coming at a slower pace than many had previously anticipated.
    Auto data firm Motor Intelligence reports more than 3.2 million “electrified” vehicles were sold last year, or 1.9 million hybrid vehicles, including plug-in models, and 1.3 million all-electric models.

    Traditional vehicles with gas or diesel internal combustion engines still made up the majority of sales, but declined to 79.8%, falling under 80% for the first time in modern automotive history, according to the data.
    Regarding sales of pure EVs, Tesla continued to dominate, but Cox Automotive estimated its annual sales fell and its market share dropped to about 49%, down from 55% in 2023. The Tesla Model Y and Model 3 were estimated to be the bestselling EVs in 2024.
    Following Tesla in EV sales was Hyundai Motor, including Kia, at 9.3% of EV market share; General Motors at 8.7%; and then Ford Motor at 7.5%, according to Motor Intelligence. BMW rounded out the top five at 4.1%.
    The EV market in the U.S. is highly competitive: Of the 68 mainstream EV models tracked by Cox’s Kelley Blue Book, 24 models posted year-over-year sales increases; 17 models were all new to the market; and 27 decreased in volume.
    There’s more uncertainty with how sales of all-electric and plug-in hybrid electric vehicles will perform this year, pending potential actions by the incoming Trump administration.

    Currently, sales of EVs and plug-in electric vehicles are being subsidized by a federal credit of up to $7,500 for the purchase of one of the vehicles, which President-elect Donald Trump could remove, along with other support for EVs.
    Cox Automotive is expecting 2025 to set another record for EV volume, at about 10% of new vehicle sales. Including hybrids, the company projects one out of every four vehicles sold to be electrified this year.
    — CNBC’s Phil LeBeau contributed to this report.

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    Bank of America tops estimates on better-than-expected investment banking, interest income

    Bank of America on Thursday posted results that topped expectations for profit and revenue on better-than-expected investment banking and interest income.
    The company said fourth-quarter profit more than doubled to $6.67 billion, or 82 cents per share, from a year earlier.
    Perhaps more than other megabanks, the firm’s fortunes seem to hinge on rates and their impact on net interest income.

    Brian Moynihan, CEO of Bank of America, speaking on CNBC’s Squawk Box at the WEF Annual Meeting in Davos, Switzerland on Jan. 16th, 2024.
    Adam Galici | CNBC

    Bank of America on Thursday posted results that topped expectations for profit and revenue on better-than-expected investment banking and interest income.
    Here’s what the company reported:

    Earnings: 82 cents vs. 77 cents expected, according to LSEG
    Revenue: $25.5 billion vs. $25.19 billion expected

    The company said fourth-quarter profit more than doubled to $6.67 billion, or 82 cents per share, from a year earlier, when the bank had a $2.1 billion Federal Deposit Insurance Corp. assessment tied to the 2023 regional bank failures and a $1.6 billion charge tied to accounting on interest rate swaps.
    Revenue jumped 15% to $25.5 billion on rising fees from investment banking and asset management and stronger trading results.
    Investment banking fees surged 44% to $1.65 billion, roughly $180 million more than analysts had expected. That indicates the company’s bankers had a strong end to the year, as just last month, CEO Brian Moynihan told investors that investment banking fees would jump 25% in the quarter.
    Unlike with rivals including Goldman Sachs, Bank of America’s trading operations didn’t significantly exceed expectations during the quarter. Fixed income revenue rose 13% to $2.48 billion, roughly in line with the StreetAccount estimate, while equities revenue rose 6% to $1.64 billion, also essentially matching expectations.
    But the firm said that net interest income, one of the most watched figures for the lender, rose 3% to $14.5 billion, exceeding estimates by about $170 million.

    Perhaps more than other megabanks, the firm’s fortunes seem to hinge on rates and their impact on net interest income. Investors will be keen to hear about the company’s target for 2025, especially as expectations for rate cuts have been reined in.
    On Wednesday, JPMorgan Chase and Goldman topped estimates on better-than-expected results from Wall Street units. Morgan Stanley is also scheduled to post results Thursday.
    This story is developing. Please check back for updates. More

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    Morgan Stanley tops estimates on strong equities and fixed income trading revenue

    Ted Pick, CEO Morgan Stanley, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 18th, 2024.
    Adam Galici | CNBC

    Morgan Stanley on Thursday topped estimates for fourth quarter earnings and revenue as the firm’s equities and fixed income traders exceeded expectations.
    Here’s what the company reported:

    Earnings: $2.22 a share vs. $1.70 LSEG estimate
    Revenue: $16.22 billion, vs. $15.03 billion estimate

    The bank said that quarterly profit more than doubled to $3.71 billion, or $2.22 a share, from a year earlier, when it had a pair of regulatory charges.
    Revenue rose 26% to $16.22 billion as results in all of the bank’s major businesses improved.
    It was the firm’s equities trading business that shone brightest in the quarter, producing a 51% jump in revenue to $3.3 billion, or nearly $650 million more than the StreetAccount estimate. Morgan Stanley cited increased client activity and strength in its prime brokerage business that caters to hedge funds.
    The firm’s fixed income operations saw revenue jump 35% to $1.93 billion, about $250 million more than the StreetAccount estimate, on rising activity in credit and commodities markets.
    Investment banking revenue rose 25% to $1.64 billion, essentially matching the StreetAccount estimate, on rising advisory and equity capital markets results.

    The bank’s massive wealth management business will be helped by high stock market values in the fourth quarter, which inflates the management fees it collects.
    Investment banking activity continued to rebound last quarter, jumping 29% in the quarter, per Dealogic figures, fueled by rising advisory and equity capital markets activity. And trading activity was supported by an eventful election season.
    On Wednesday, JPMorgan Chase, Goldman Sachs and Citigroup each topped expectations, helped by better-than-expected revenue from trading or investment banking.
    This story is developing. Please check back for updates. More