SOTS 2nd Hour: Bank Earnings Breakdown & Bank of America CEO Moynihan; Plus - DC Headlines Wrap-up 10/15/25

SPEAKER_1 (0:00)

Introducing Fidelity Trader Plus.

David Faber (0:02)

With customizable tools and charts, you can access across all your devices. Try our most powerful trading platform yet at fidelity.com/traderplus.

SPEAKER_1 (0:10)

Investing involves risk, including risk of loss.

David Faber (0:12)

Fidelity Broker Services LLC, member NYSE SIPC.

Julia Boorstin (0:15)

Introducing the redesigned Dell PC with the Intel Core Ultra Processor. It helps you handle a lot, even when your holiday to do list gets to be a lot, like organizing your holiday shopping and responding to holiday requests and customer questions and customers requesting custom things, plus planning the perfect holiday dinner for vegans, vegetarians, pescetarians and Uncle Mike's carnivore diet. Luckily, the Dell PC helps you handle a lot. And with all day battery life, you can do it all faster to get it all done. That's the power of a Dell PC with Intel inside. Get yours at dell.com/holiday.

Carl Quintanilla (0:45)

I'm Carl Quintanilla with Leslie Picker, David Faber here at Post 9 of the New York Stock Exchange. As for markets, about 1 percent gains for S&P NAS, not quite taking back Friday's intraday high, but the VIX is back sub-20, 10 years circling right around 401 Today, an exclusive interview with B of A's chairman and CEO Brian Moynihan, talking his bank's Q3 beat and strength of the consumer, some card spend, plus stacking the chips, ASML moving higher following its latest earnings print with other semiconductors joining in on that rally.

Leslie Picker (1:16)

And let's get right to the banks, with Bank of America and Morgan Stanley headlining today's results, some stellar performance now that the market has opened as well. Morgan Stanley up nearly 7%. That call is still ongoing. Ted Pick was just talking about the golden age of investment banking, which I think you can see really reflected in these results. They beat on all metrics, essentially, except for expenses. But, you know, in terms of their three major businesses, big beats relative to expectations. Investment banking up 44% during the quarter led largely by advisory, which is basically the fees generated from advising on mergers and acquisitions transactions, as well as equity underwriting, which was a huge beat for them as well. And equities trading beat, and that was up 35%.

Before the call, I was able to actually talk with Morgan Stanley CFO, Sharon Yeshaya, about the current M&A environment. And she had some interesting comments just about, you know, she says basically from the lens, we are just at the beginning. Oh, okay, here, so she is talking about M&A for the firm itself. So they have a lot of excess capital. And she says, quote, we have the optionality and we're in a position where those inorganic opportunities to the extent that we execute are going to be places that are key and core to the current strategy. So we don't think we need to do anything transformational. Obviously, Morgan Stanley has the track record of doing some very transformational deals. But with that excess capital, especially with the rollback or the expected rollback of some of the regulations that have been causing them to hold more, there are a lot of questions around, OK, what are you going to do with it now? You have all this excess capital. Are you going to be lending more? Are you going to be buying other companies? And she basically said in this this one on one conversation, you know, we feel like our transformational deals have been done. We'll look for things that are beneficial to us. But right now, we're really focused on organic growth at this point in time. And just that comment that she she said on the dealmaking environment broadly, she says from our lens, we're just at the beginning. And she talked a bit about how the current earnings that you see reflected today are largely driven by strategics and IPOs, and sponsors still have not really done enough deals to be reflected in the results. And that's largely comprising the pipeline. So as you know, David, that obviously could lead to a big uptick, a big unlock for future dealmaking activity once the sponsors really get involved in a big way. So that's kind of something that we heard on the Goldman Sachs call. We heard that on the JP Morgan call with a trillion dollars in dry powder, and whether that ultimately leads to more deal activity. But basically, Yeshaya said, you know, that's not what these results are about. These are strategics. These are IPOs. And there's still this huge untapped opportunity for dealmaking down the road.

David Faber (4:08)

Yeah, interesting. I mean, it's unclear when and if the financial sponsors, the leveraged buyouts that we're talking about, private equity will really come to the fore. Obviously, they have a lot of money and funds that they have yet to spend. But they also have to get exits done from other funds that predate whatever the new money may be. And you want to return the capital before you call new capital. Yes. That said, what I've been hearing and been saying on on air for quite some time is there's certainly a lot of optimism around potential deals, strategic and the like, and Bank of America also on their call. And I know you know this said similarly that there are more certainty around trade and tariffs and that pick up an activity in the third quarter as well. They cite double digits in terms of what what they're seeing in terms of potential activity. We'll see. We did have the largest go private of all time just last week, right, where the Saudis are buying electronic arts for over 50 plus billion dollars, a deal that Goldman advised on and JPMorgan financed. And the fees there, I'm sure, will be quite significant.