Why America’s Inflation Problem Isn’t Going Away

Why America’s Inflation Problem Isn’t Going Away – Prof G Markets

Market views

Bullish

JPM— JPMorgan reported record revenues across every major business with blowout earnings driven by strong capital markets activity, loan growth, and high net interest margins in a favorable economic environment.
GS— Goldman Sachs posted one of its strongest quarters in history with profits up nearly 80% year over year, driven by exceptional capital markets performance and the AI infrastructure buildout.
BAC— Bank of America topped expectations with strong earnings and rose 2% on the news, benefiting from the same favorable banking environment as peers.
INFRA— AI infrastructure buildout is creating a multiplier effect benefiting banks through financing, lending, debt issuance, and wealth management opportunities, with economic benefits extending beyond just AI companies to energy and other sectors.
EQUITIES— Equity trading volumes surged dramatically with banks reporting 45-90% year-over-year increases, driven by market volatility and strong investor activity.

Bearish

WFC— Wells Fargo fell 2% despite beating expectations due to concerns about rising funding costs and deposit cost pressure eating away at net interest income growth.
C— Citigroup fell 5% despite beating expectations, suggesting investor concerns about the sustainability of current performance levels.
IBM— IBM plunged 25% after preannouncing earnings that missed expectations, marking its worst day of all time.
ENERGY— Oil prices are rising again to $85/barrel (up 20% from June) as the Iran war ceasefire has ended, creating inflationary pressures that will likely reverse the recent positive CPI trend.

Not investment advice.