Investment banking activity rises, bitcoin rallies: Catalysts

On today's episode of Catalysts, Hosts Seana Smith and Brad Smith break down some of the biggest stories of the trading day. Major US banks have all reported their earnings. Morgan Stanley (MS) closed out the group, topping analysts' expectations and delivering a big boost in investment banking revenue. American Banker editor-in-chief Chana Schoenberger explains that her biggest takeaway from bank earnings is that "investment banking is up and trading is up." She attributes this trend to two factors: the markets being up and an increase in dealmaking. She notes that M&A (mergers and acquisitions) activity has increased this year and will continue its momentum as interest rates fall. Regional banks Citizens Financial Group (CFG) and US Bancorp (USB) have posted their third quarter results. Citizens Bank posted revenue that fell just short of Wall Street's expectations of lower net interest income. On the other hand, US Bancorp's net interest income topped estimates, as it benefited from higher borrowing costs. Major indexes (^DJI, ^IXIC, ^GSPC) are rallying amid third quarter earnings season. However, questions remain about the sustainability of these gains in the current bull market, which is entering its third year. IG North America CEO J.J. Kinahan expresses optimism about the market's broad-based rally, viewing it as a positive indicator. "We're at a wall of worry. Nobody believes in the rally," he says, suggesting this skepticism could fuel further gains. However, he highlights some sector-specific concerns, particularly in semiconductor stocks. Kinahan points to Intel (INTC) as "an outlier" among semiconductor names, noting the stock's difficulty maintaining momentum. Bitcoin (BTC-USD) prices have climbed above $67,000 on Wednesday — its highest since July. The jump was influenced by Vice President Kamala Harris's newly announced proposals to establish a clearer regulatory framework for digital assets. The cryptocurrency's upward momentum has triggered a broader rally across crypto-related stocks, including Coinbase (COIN), MicroStrategy (MSTR), Riot Platforms (RIOT), and CleanSpark (CLSK). The US government is reportedly considering capping chip sales to certain countries. The move would affect chipmakers like Nvidia (NVDA) and Advanced Micro Devices (AMD). Macrolens chief strategist and managing principal Brian McCarthy tells Yahoo Finance, "It's unclear whether yesterday's news suggesting there could be tightened restrictions on the UAE and Saudi Arabia is or isn't related to those countries possibly funneling chips to China because it's very hard to sort of bottle up China's access to these chips through third parties." He explains that despite the US limiting chip exports to China due to national security risks, widespread smuggling of the tech persists. This post was written by Melanie Riehl