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Marketplace

Big banks' boom time

25 min episode · 2 min read

Episode

25 min

Read time

2 min

Topics

Productivity, Investing, Fundraising & VC

AI-Generated Summary

Key Takeaways

  • Bank Revenue Concentration: Large banks gain market share through mergers and acquisitions activity, with JPMorgan's investment banking revenue up 16% and trading up 25% in Q3, benefiting from pent-up deal demand and favorable regulatory environment for merger approvals.
  • Small Business Price Pressures: Nearly 25% of small businesses raised prices last month, with one-third planning increases within three months. Small businesses operate as price takers with limited pricing power compared to large corporations, forcing defensive cost-passing despite competitive pressures.
  • E-Waste Technology Transition: Microsoft's Windows 10 support termination affects 400 million computers unable to upgrade to Windows 11, creating an estimated 1.6 billion tons of e-waste. Users face $1,500 replacement costs or paid extended support options without technical assistance included.
  • Romance Publishing Economics: Romance print sales increased 24% year-over-year, pulling the entire publishing industry into profitability. Romance readers consume approximately four books monthly versus one book monthly for average Americans, with authors using self-publishing platforms to meet high-volume demand directly.

What It Covers

Major US banks report strong earnings driven by investment banking and trading activity, while small business optimism declines amid inflation concerns. Microsoft ends Windows 10 support, romance publishing boosts book sales, and new tariffs increase costs.

Key Questions Answered

  • Bank Revenue Concentration: Large banks gain market share through mergers and acquisitions activity, with JPMorgan's investment banking revenue up 16% and trading up 25% in Q3, benefiting from pent-up deal demand and favorable regulatory environment for merger approvals.
  • Small Business Price Pressures: Nearly 25% of small businesses raised prices last month, with one-third planning increases within three months. Small businesses operate as price takers with limited pricing power compared to large corporations, forcing defensive cost-passing despite competitive pressures.
  • E-Waste Technology Transition: Microsoft's Windows 10 support termination affects 400 million computers unable to upgrade to Windows 11, creating an estimated 1.6 billion tons of e-waste. Users face $1,500 replacement costs or paid extended support options without technical assistance included.
  • Romance Publishing Economics: Romance print sales increased 24% year-over-year, pulling the entire publishing industry into profitability. Romance readers consume approximately four books monthly versus one book monthly for average Americans, with authors using self-publishing platforms to meet high-volume demand directly.

Notable Moment

A Seattle Airbnb host reports zero Canadian bookings after January 2025 compared to typical annual visits from two to three Canadian guests, indicating international travel pullback affects small hospitality businesses despite maintaining overall occupancy through domestic demand.

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Episode Transcript

This podcast is supported by Odoo. Some say Odoo business management software is like fertilizer for businesses because the simple efficient software promotes growth. Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable. And some describe Odoo's programs for manufacturing, accounting, and more as building blocks for creating a custom software suite. So Odoo is fertilizer, magic beanstalk building blocks for business. Odoo, exactly what businesses need. Sign up at odoo.com. That's odoo.com. Hey, hockey fans. Can't get enough hockey? Then get more with Team USA. Check out Team USA games at USA Hockey Arena in Plymouth packed with all the hockey thrills and energy, but at a family friendly price. Grab your team USA tickets today at usahockeyntdp.com. Big banks doing great. Small businesses, not so optimistic. And we'll add a little romance to the show. From American Public Media, this is Marketplace. In Washington, I'm Kimberly Adams in for Kai Risdall. It's Tuesday, October 14. Good to have you along. We got a bunch of earnings reports this morning from big banks, and things are looking pretty good from the perspective of America's titans of finance. Citibank reported revenue was up 9% in just the third quarter, up 15% in a year. JPMorgan's investment banking revenue was up 16% in the quarter. Revenue from trading was up 25%. Goldman Sachs, Wells Fargo also did very well. One question though, why is this happening, especially at a time when consumers and small businesses are feeling so anxious? Marketplace's Sabri Beneshore asked around. It's not just one bank here or there. It is all the banks, all the big ones anyway. They are doing great. Goliath is winning. Mike Mayo is a managing director at Wells Fargo Securities. Wall Street banking is concentrated among the largest players, Citigroup, Bank America, JPMorgan, a few others, and they continue to gain share. But the big banks' bigness is not the only thing they've got going for them right now. Art Hogan is chief market strategist at B. Riley Wealth. The universal thread is the increase in activity in things like mergers and acquisitions, investment banking, IPOs. Deals, banks get paid to set them up, and corporations and investors are aching to do them. You've got investors that have put money in private are aching to do them. You've got investors that have put money in private companies for a decade. They desperately wanna get bought out or have an IPO. There are mergers that companies have been too afraid to do, but this year, they saw their chance. It seems to be a more favorable regulatory environment for actually getting mergers approved. Things got kinda put on hold in the spring with the trade war, but in summer, it felt like maybe that situation was calming down. So some of that pent up demand for deal making started to flood out. Gabriel Hack is a senior analyst with Moody's ratings. As we got resolution …

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  • by Odoo

    SPONSORS: Odoo (odoo.com)

Products

  • by Microsoft

    Microsoft's Windows 10 support termination affects 400 million computers unable to upgrade to Windows 11, creating an estimated 1.6 billion tons of e-waste.
  • by Microsoft

    Microsoft's Windows 10 support termination affects 400 million computers unable to upgrade to Windows 11, creating an estimated 1.6 billion tons of e-waste.

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