Weeks Ending October 10th & 17th – Cockroaches
*the week ending October 10th
*the week ending October 17th
Economic data continues to be light/deferred as the government remains in shutdown. Betting markets such as Kalshi and Polymarket are projecting that the shutdown will become the longest in US history, breezing past 35 days. However, as of this morning (10/20) White House Economic Advisor, Hassett, says the shutdown could end this week.
Bank earnings lead the charge. The five largest US banks, JPMorgan, Bank of America, Citigroup, Goldman Sachs, and Wells Fargo posted strong third quarter results, primarily due to a surge in Investment Banking. The average increase for investment banking fees were 28.8% as an increase around mega deals has become prevalent. There have been 29 deals over $10Bln so far in 2025. Analyst revisions for the third quarter are revising higher since its trough in late September.
Credit Market Cracks. Recent bankruptcy from Tricolor and FirstBrands have caused JPMorgan to take a $170Mln charge with CEO, Jamie Dimon stating: “when you see one cockroach, there are probably more.” Other lenders such as Jefferies has nearly $715Mln in exposure to the FirstBrands bankruptcy. Additionally, US High Yield OAS jumped 42bps after news broke of the bankruptcies.
The Week Ahead:
- Leading Economic Indicators (10/20)
- Consumer Price Index (10/24) *if the government ends the shutdown
- Michigan Sentiment (10/24)
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