- October conjures up dark connotations on Wall Street. Indeed, the mere mention of October manifests feelings of impending doom among stock investors. October's susceptibility to history-making stock market crashes is to blame for its reputation as a month to be feared. The stock market crash of 1929, the 22.6% dive on Black Monday in 1987, and the market meltdown in October 2008 have left scar tissue on the psyche of the American investor.
- The Israel-Hamas conflict; the war in Ukraine; and friction between the US, Europe, and China worry us all.
- With the recent third-quarter results from all major investment banks—including JPM, GS, Citi, Bank of America, and MS—there's enhanced visibility into the performance of investment bankers in M&A, as well as in debt and equity capital markets. Banks are facing a challenge with having too many bankers for the current market size. Even with some successful IPOs, the industry hasn't fully rebounded. GS has noted a decline in its investment banking fee backlog compared to both the end of the second quarter of 2023 and the end of 2022. Fraser (Citi) has termed the market as "fragile," suggesting that deals expected for Q4 might now shift to Q1. Revenues in the investment banking sector have seen a downturn across the board in the first nine months of 2023. Distinctly, GS and MS have faced sharper declines of 17% and 18% respectively, compared to their peers. Looks like layoffs are back on the table. Banks are still hiring opportunistically but it is very slow going. Be patient. Cast a wide net.
- Citigroup CEO Jane Fraser observed that investment banking downturns typically last no more than seven quarters "because that's often how long it takes for pricing expectations to fully adjust to new realities." We're now seven quarters into the current downturn, said Fraser. The recovery is due. (efinancial careers)
- Layoffs lurk on Wall Street as macroeconomic outlook remains murky. Top U.S. banks could cut jobs further to keep their expenses in check, especially if lingering economic weakness derails a fledgling recovery in investment banking, according to comments made at their recent earnings. (Reuters)
- Big banks are quietly cutting thousands of employees, and more layoffs are coming. Banks disclose total headcount numbers every quarter. While the aggregate figures mask the hiring and firing going on beneath the surface, they are informative. The deepest reductions have been at?Wells Fargo?and?Goldman Sachs, institutions that are wrestling with revenue declines in key businesses. They each have cut roughly 5% of their workforce so far this year. (CNBC)
- Private equity firms are facing the worst year in a decade for selling portfolio companies after higher interest rates and geopolitical tensions ended the buyout industry’s boom. (FT)
In a recent poll of 859 bankers on Linkedin, 81% believe that their 2023 bonus will be down by 10% or more Y-o-Y. Yuck.
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Although an investment banking recruiter may reach out with a connection request on Linkedin or send an email regarding a position, it does not always mean that you’re a perfect fit for their open roles.?
They think you’re a good fit for a current lateral investment banking role that they are trying to fill but you want something else.?
Financial recruiters are compensated on either a retained or a success fee basis which is paid by the Company. Due to their compensation structure, investment banking and private equity recruiters are hyper-focused on filling their open engagements.
