{"id":107237,"date":"2021-10-18T09:30:00","date_gmt":"2021-10-18T13:30:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=107237"},"modified":"2023-01-19T17:37:55","modified_gmt":"2023-01-19T22:37:55","slug":"mass-production","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/stocks\/mass-production\/","title":{"rendered":"Mass Production"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-what-s-going-on\">What&#8217;s going on?<\/h2>\n\n\n\n<p>A veritable assembly line of US banking giants all posted similarly better-than-expected quarterly updates on Thursday.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-this-mean\">What does this mean?<\/h2>\n\n\n\n<p>Let\u2019s start with&nbsp;<a href=\"https:\/\/www.cnbc.com\/2021\/10\/14\/bank-of-america-bac-earnings-q3-2021-.html\">Bank of America<\/a>&nbsp;(BoA),&nbsp;<a href=\"https:\/\/www.cnbc.com\/2021\/10\/14\/citigroup-c-earnings-q3-2021.html\">Citigroup<\/a>, and&nbsp;<a href=\"https:\/\/www.cnbc.com\/2021\/10\/14\/morgan-stanley-ms-earnings-q3-2021.html\">Morgan Stanley<\/a>, all of which have been making the most of the recent influx of mergers and acquisitions: revenues from their investment banking segments \u2013 which take a cut of every deal they advise on \u2013 were up 23%, 40%, and 67% respectively versus the quarter before. That helped send their profits up by a better-than-expected 58%, 48%, and 25% versus the same time last year.<br><br><a href=\"https:\/\/www.cnbc.com\/2021\/10\/14\/wells-fargo-wfc-earnings-q3-2021.html\">Wells Fargo<\/a>, meanwhile, had its personal banking business to thank for its strong showing: the division\u2019s profit almost tripled compared to the same time last year, with shoppers getting back to using cards and racking up fees. That led the company\u2019s profit to jump 60% from a year ago.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-should-i-care\">Why should I care?<\/h2>\n\n\n\n<p><strong><em>The bigger picture:&nbsp;<\/em><\/strong><em>A free billion? Yes please.<\/em><\/p>\n\n\n\n<p>Just like with JPMorgan Chase&nbsp;<a href=\"https:\/\/www.finimize.com\/wp\/news\/booty-call\/\">earlier<\/a>&nbsp;in the week, BoA, Citigroup, and Wells Fargo had tucked away money in case pandemic-stricken borrowers weren\u2019t able to pay off their debts. And just like JPMorgan, they\u2019re at a point where they feel relaxed enough to put that cash back into the business. Not a bad way to end a quarter: BoA and Citigroup added $1.1 billion to their bottom lines, and Wells Fargo $1.7 billion.<br><br><strong><em>Zooming out:&nbsp;<\/em><\/strong><em>Interest or death.<\/em><\/p>\n\n\n\n<p>Ultra-low interest rates have been the thorn in banks\u2019 sides this year, hobbling the amount banks can make from their loans businesses. So they might be pleased to see data out earlier this week&nbsp;<a href=\"https:\/\/www.cnbc.com\/2021\/10\/13\/the-consumer-price-index-rose-5point4percent-year-over-year-in-september-vs-5point3percent-estimate.html\">showing<\/a>&nbsp;that&nbsp;US consumer prices rose by a higher-than-expected 5.4% last month versus the year before. That\u2019ll put pressure on the US Federal Reserve to raise interest rates sooner rather than later to keep inflation in check, which should give banks\u2019 profits a nice little boost.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted on October 14, 2021 &#8211; <a href=\"https:\/\/www.finimize.com\/wp\/news\/mass-production\/\">Mass Production<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A veritable assembly line of US banking giants all posted similarly better-than-expected quarterly updates on Thursday.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6,8,9,22,26,3],"tags":[246],"contributors-categories":[13597],"class_list":{"0":"post-107237","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-north-america","7":"category-region","8":"category-securities","9":"category-stocks","10":"category-text-articles","11":"category-traders-insight","12":"tag-banks","13":"contributors-categories-finimize"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Mass Production | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"A veritable assembly 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