Finance

Jeffrey Gundlach speaking at the 2019 SOHN Conference in New York on May 5, 2019.
Adam Jeffery | CNBC

DoubleLine Capital CEO Jeffrey Gundlach believes the Federal Reserve is missing the bigger picture again.
“The Fed looks like Mr. Magoo, driving around, bumping into things. Then became systematic, got inflation to come down,” Gundlach said in an investor webcast Tuesday evening. “But for the past five months we’ve had another rising trend. This has got the Fed back into short-termism, reacting too much to short-term data, not being strategic.”

Gundlach, a noted fixed income investor whose firm manages $95 billion, made the comments before the latest reading of the consumer price index on Wednesday. The CPI increased a seasonally adjusted 0.4% on the month, putting the 12-month inflation rate at 2.9%
Excluding food and energy, the core CPI rate came in slightly lighter than expected both on a monthly basis and an annual basis. While the numbers compared favorably to forecasts, they still show that the Fed has work to do to reach its 2% inflation target.

“CPI month-over-month change has got the Fed zigzagging,” Gundlach said. “The market has gone from an aggressive assumption of Fed cuts to just one cut in 2025.”
The Fed has cut benchmark rates by a full percentage point since September, a month during which it took the unusual step of lowering by a half point. In December, the central bank projected only two quarter-point rate cuts in 2025, fewer than the four reductions it previously forecast.

“The Fed is now in sync with the market, and the market is not given further signals for a change,” Gundlach said. “That is consistent with the Fed slowing down its change of monetary policy.”
Futures pricing continued to imply a near certainty that the Fed would stay on hold at its Jan. 28-29 meeting but leaned more toward two quarter-point rate cuts through the year, assuming quarter percentage point increments, according to CME Group.

Don’t miss these insights from CNBC PRO More

“There has been a meaningful shift in CEO confidence, particularly following the results of the U.S. election,” Goldman Sachs CEO David Solomon said, according to a transcript from FactSet.
Donald Trump, who is set to return to the White House on Monday, is seen as broadly more business-friendly than outgoing President Joe Biden.
Solomon’s comments line up with some survey data that suggests renewed confidence among business leaders.

David Solomon, CEO of Goldman Sachs, speaks during the Reuters NEXT conference, in New York City, U.S., December 10, 2024. 
Mike Segar | Reuters

The election of Donald Trump in November and a swing back to Republican power in Washington is already starting to make an impact in the business world, according to Goldman Sachs CEO David Solomon.
The bank executive said on a conference call Wednesday that other CEOs are feeling better about the direction of the economy and their businesses since the presidential election, even though Trump has yet to take office.

“There has been a meaningful shift in CEO confidence, particularly following the results of the U.S. election,” Solomon said, according to a transcript from FactSet.
“Additionally, there is a significant backlog from sponsors and an overall increased appetite for dealmaking supported by an improving regulatory backdrop,” he continued.
The comments line up with some survey data that suggests renewed confidence among business leaders. The latest Chicago Fed Survey of Economic Conditions showed an improved outlook for the next 12 months. The NFIB Small Business Optimism Index rose to its highest level since October 2018 in December.
To be sure, executives on JPMorgan Chase’s earnings call said that the optimism among business leaders has not yet resulted in loan growth, according to a FactSet transcript.
Stocks rose sharply in the immediate aftermath of Trump’s win, as investors cheered the prospect of lower taxes and fewer regulations. However, many of those gains have since disappeared, in part due to a recent rise in interest rates.

Trump, who is set to return to the White House on Monday, is seen as broadly more business-friendly than outgoing President Joe Biden. During his campaign, Trump floated lowering taxes and reducing regulation, including around energy. However, his proposed tariffs have made some investors and business leaders nervous about the potential for higher prices and a disruptive trade war.
Solomon’s comments came on a conference call discussing Goldman’s fourth-quarter results. The bank beat estimates on the top and bottom lines for the period, with its profit roughly doubling year over year.

Don’t miss these insights from CNBC PRO More

According to Jamie Dimon, chief executive of JPMorgan Chase and king of Wall Street, bankers were elated upon Donald Trump’s election victory. Many chafed under Joe Biden’s presidency, as mergers and bank fees faced additional scrutiny, and new capital-market rules came thick and fast. Now, with the inauguration of Mr Trump imminent, American financiers will discover just how much cause they have for celebration. More

JPMorgan Chase on Wednesday topped estimates for fourth-quarter revenue and profit.
The bank was helped by better-than-expected net interest income and fixed income trading and investment banking results.
Profit rose 50% to $14 billion in the quarter as noninterest expenses fell 7% from a year earlier.

JPMorgan Chase on Wednesday topped estimates for fourth-quarter revenue and profit, helped by better-than-expected net interest income and fixed income trading and investment banking results.
Here’s what the company reported:

Earnings: $4.81 a share vs. $4.11 LSEG estimate
Revenue: $43.74 billion vs. $41.73 billion expected

The bank said profit rose 50% to $14 billion in the quarter as noninterest expenses fell 7% from a year earlier, when the firm had a $2.9 billion FDIC assessment tied to regional bank failures.
Revenue climbed 10% to $43.74 billion, helped by Wall Street operations and better-than-expected net interest income of $23.47 billion, exceeding the StreetAccount estimate by roughly $400 million.
Fixed income trading revenue jumped 20% to $5 billion, topping the $4.42 billion StreetAcount estimate on rising credit and currency results. Equities revenue climbed 22% to $2 billion, missing the $2.37 billion estimate.
Investment banking fees jumped 49% to $2.48 billion, topping the $2.39 billion estimate.
CEO Jamie Dimon said in the release that the economy was “resilient,” buoyed by low unemployment and healthy consumer spending, as well as optimism for the Trump administration’s pro-growth agenda.

“However, two significant risks remain,” Dimon said. “Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time. Additionally, geopolitical conditions remain the most dangerous and complicated since World War II. As always, we hope for the best but prepare the firm for a wide range of scenarios.”
Banks ended the year with several reasons to be bullish: Wall Street activity has picked up at the same time that Main Street consumers remain resilient, while the election victory of Donald Trump has led to hopes of regulatory relief.
While the business is thriving, analysts will likely ask Dimon about his succession planning after his No. 2 executive, Daniel Pinto, said he was stepping down as chief operating officer in June. Dimon signaled last year that he was likely to step down as CEO within five years.
Another question is how the changing outlook for Federal Reserve rate cuts will impact the bank across its sweeping operations. While Fed officials expect two more cuts this year, economic indicators could cause them to pause.
Finally, analysts may press JPMorgan on what it intends to do with a possible windfall of capital if Trump regulators present a gentler version of the Basel 3 Endgame, as potential nominees have supported. Dimon said last May that share buybacks would be muted because the stock was expensive, but they’ve only climbed since.
Besides JPMorgan, Goldman Sachs, Wells Fargo and Citigroup are also out with quarterly and full-year results Wednesday, while Bank of America and Morgan Stanley are due to report on Thursday.
This story is developing. Please check back for updates. More

Jane Fraser speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019.
Kyle Grillot | Bloomberg via Getty Images

Citigroup reported its fourth-quarter earnings Wednesday morning ahead of Wall Street’s opening bell, beating estimates on the top and bottom lines.
Shares of the bank rose more than 2% in premarket trading.

Here is how the company did relative to LSEG analyst consensus estimates:

Earnings: $1.34 a share, vs $1.22 expected
Revenue: $19.58 billion, vs $19.49 billion expected

Citi’s net income was $2.86 billion from the quarter, an improvement from a net loss of $1.84 billion a year ago. Year-over-year comparisons for fourth quarter income metrics may be complicated by charges Citi booked in the final period of 2023.
The bank reported growth across several different business units during the fourth quarter. Markets revenue jumped 36% year over year, with both the fixed income and equity businesses growing. Revenue for the wealth and services unites climbed 20% and 15%, respectively, year over year.
Banking revenue grew 12%, and that expanded to 27% when including the impact of loan hedges.
“2024 was a critical year and our results show our strategy is delivering as intended and driving stronger performance in our businesses. Our net income was up nearly 40% to $12.7 billion and we exceeded our full-year revenue target, including record years in Services, Wealth and U.S. Personal Banking,” CEO Jane Fraser said in a press release.

On the analyst call later Wednesday, investors will also be looking for progress updates about Fraser’s turnaround efforts. Fraser took over the bank in March 2021 and has focused on slimming down the company, including selling off some international units.
Citi’s stock was a strong performer in 2024, rising nearly 37% on the year. The stock was up more than 4% so far this year entering Wednesday. More

Wells Fargo shares climbed Wednesday after the bank posted better-than-expected earnings and issued strong guidance on net interest income for 2025.
Here’s what the bank reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Adjusted earnings per share: $1.42 vs. $1.35 expected
Revenue: $20.38 billion versus $20.59 billion expected

Net income of $5.1 billion, or $1.43 per diluted common share, came in 47% higher than the figure from the fourth quarter in the year prior.
The San Francisco-based lender said it expects 2025 net interest income, a key measure of what a bank makes on loans, to be 1% to 3% higher than 2024’s number of $47.7 billion.
Shares of Wells jumped 3% in premarket trading Wednesday following the release of earnings.
“Our solid performance this quarter caps a year of significant progress for Wells Fargo,” CEO Charlie Scharf said in a statement. “Our earnings profile continues to improve, we are seeing the benefit from investments we are making to increase our growth and improve how we serve our customers and communities, we maintained a strong balance sheet, we returned approximately $25 billion of capital to shareholders, and we made significant progress on our risk and control work.”
Wells Fargo’s investment banking fees jumped 59% to $725 million in the fourth quarter compared with a year earlier.

The bank repurchased 57.8 million shares, or $4.0 billion, of common stock in fourth quarter 2024.
Shares of the bank surged nearly 43% in 2024, and the stock is up 1.4% so far in January.

Don’t miss these insights from CNBC PRO More

Here’s what the company reported: Earnings of $11.95 a share vs. $8.22 LSEG estimate
Revenue: $13.87 billion vs. $12.39 billion expected

David Solomon, Chairman & CEO Goldman Sachs, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 17th, 2024.
Adam Galici | CNBC

Goldman Sachs on Wednesday posted fourth-quarter results that topped estimates on stronger than expected trading revenue.
Here’s what the company reported:

Earnings: $11.95 a share vs. $8.22 LSEG estimate
Revenue: $13.87 billion vs. $12.39 billion expected

The bank said profit roughly doubled from a year earlier to $4.11 billion, or $11.95 a share, as revenues grew while expenses shrank. Revenue jumped 23% to $13.87 billion, helped by higher equities and fixed income trading revenue, and rising investment banking results.
Equities trading generated $3.45 billion in revenue, roughly $450 million more than the StreetAccount estimate. Fixed income trading made $2.74 billion in revenue, topping the estimate by almost $300 million. Investment banking fees of $2.05 billion essentially matched the estimate.
Another source of strength for the bank was its asset and wealth management division, which saw revenue jump 8% to $4.72 billion, topping estimates by $560 million.
“With an improving operating backdrop and growing CEO confidence, we are harnessing the power of One Goldman Sachs to continue to serve our clients with excellence and create further value for our shareholders,” CEO David Solomon said in the release.
Goldman Sachs is riding a wave of enthusiasm over a rebound in Wall Street deals.

The bank’s shares jumped nearly 50% last year, topping its big bank rivals, as the Federal Reserve’s easing cycle and the November election of Donald Trump boosted expectations for mergers and stock deals.
For Solomon, the setup couldn’t be more different than a year earlier, in the aftermath of a strategic pivot away from an ill-fated foray into consumer finance.
Back then, Solomon was under pressure to appease internal stakeholders including Goldman partners as losses tied to consumer finance mounted, and as Wall Street deals dried up because of rising rates and heightened regulatory scrutiny.
JPMorgan Chase is also reporting results Wednesday, along with Wells Fargo and Citigroup, while Bank of America and Morgan Stanley are due to report on Thursday.
This story is developing. Please check back for updates. More

Mark Wiedman, head of BlackRock’s global client business, attends the Global Financial Leaders’ Investment Summit, in Hong Kong, Nov. 8, 2023.
Tyrone Siu | Reuters

Mark Wiedman, a senior BlackRock executive with a tenure that spans more than 20 years, is leaving the asset manager, according to a person familiar with the matter.
Wiedman, head of the global client business for the past two years, was believed to be a potential successor to Chief Executive Larry Fink.

Wiedman was instrumental in driving BlackRock’s growth in passive investing. From 2011 to 2019, he led BlackRock’s exchange-traded and index strategies while assets under management in the business increased from $500 billion to $1.7 trillion.
He joined BlackRock in 2004 to oversee the firm’s emergency assistance to governments and financial institutions during the financial crisis.
BlackRock is the world’s largest asset manager with assets under management hitting a record $11.5 trillion in the fourth quarter. The firm made two big acquisitions last year in a push to expand in private credit and alternatives. In December, the financial firm agreed to buy HPS Investment Partners for $12 billion in stock, as BlackRock looks to grow its presence in the highly popular private credit space. BlackRock also acquired Global Infrastructure Partners, an infrastructure investor, for $12.5 billion last year.

Don’t miss these insights from CNBC PRO More