Daily Sector Snapshot — 1/15/25
Bespoke Baskets Update — January 2025
Q4 2024 Earnings Conference Call Recaps: Citigroup (C)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Citigroup’s (C) Q4 2024 earnings call.
Citigroup (C) is a global financial services leader offering a broad range of products, including consumer banking, wealth management, corporate lending, investment banking, and treasury and trade solutions (TTS). This quarter, Citi reported net income up 40% YoY to $12.7 billion and revenue rising 5% (ex-divestitures). Key drivers included a 9% growth in Services revenue, a record year for Equities (up 26%), and Wealth Management fee growth of 18%. Global operations benefited from emerging market strength, particularly in Asia, while the US consumer and corporate sectors led domestic growth. The bank accelerated its digital transformation, deploying AI to improve efficiency for 143,000 employees and launching Citi Payments Express in 18 countries. Challenges include ongoing regulatory and data investments, contributing to an updated 2026 ROTCE target of 10-11%. The Banamex IPO remains a focus, with timing dependent on market conditions. Citigroup reported a triple play this quarter, and the stock was up around 7.5% on 1/15 as a result…
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Q4 2024 Earnings Conference Call Recaps: BlackRock (BLK)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers BlackRock’s (BLK) Q4 2024 earnings call.
BlackRock (BLK), the world’s largest asset manager with $11.6 trillion in AUM, provides investment management, risk management, and technology services to institutional and retail clients globally and is known widely for its iShares ETFs and Aladdin technology platform. BLK closed 2024 with record net inflows of $641 billion, including $281 billion in Q4 alone, and reached new highs in revenue ($20.4 billion, up 14% YoY) and operating income ($8.1 billion, up 23%). The company emphasized its expanding private markets platform, now projected to contribute 20% of revenue with acquisitions like GIP and Preqin. ETFs remained a cornerstone, driving $390 billion in inflows, including $50 billion into its Bitcoin ETP. Retirement solutions grew with LifePath Paycheck, and Aladdin saw 12% ACV growth, thanks to major client wins. BLK beat EPS and revenue estimates as shares opened 6.4% higher on 1/15…
Continue reading our Conference Call Recap for BLK by becoming a Bespoke Institutional subscriber. You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call Recap. To sign up, choose either the monthly or annual checkout link below:
Q4 2024 Earnings Conference Call Recaps: JPMorgan Chase (JPM)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers JPMorgan Chase’s (JPM) Q4 2024 earnings call.
JPMorgan Chase (JPM) is the largest bank in the US by assets, operating across consumer and commercial banking, investment banking, wealth management, and asset management. The bank’s performance offers insights into the broader economy, touching on consumer behavior, corporate activity, and macroeconomic trends. JPM reported Q4 2024 net income of $14 billion on $43.7 billion in revenue, reflecting a 10% YoY increase. Investment banking revenue surged, with advisory fees up 41% and markets revenue climbing 21%, supported by strong trading activity. Consumer banking saw 11% growth in card outstandings and a 7% rise in auto originations, while deposits stabilized. Asset and wealth management posted $76 billion in net inflows, with AUM hitting $4 trillion. The firm highlighted pressures on net interest income due to rate cuts but expects a recovery in the second half of 2025. After beating estimates, JPM shares rose 2% through midday on 1/15…
Continue reading our Conference Call Recap for JPM by becoming a Bespoke Institutional subscriber. You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call Recap. To sign up, choose either the monthly or annual checkout link below:
Chart of the Day – AI’s Pullback
Bespoke’s Morning Lineup – 1/15/25
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“Mothers are often fondest of the child which has caused them the greatest pain.” ― Victor Hugo, The Hunchback of Notre-Dame
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
To view yesterday’s CNBC segment, click on the image below.
The last few days have seen a trickle of earnings reports, but this morning, the Q4 earnings season started in earnest with reports from six major banks/brokerages. After a very strong 2024, the banks have kicked off 2025 on a mixed note. Of the six companies reporting this morning, three are up YTD (C, JPM, and WFC), and three are lower (BK, BLK, and GS) for an average YTD change of 0.27% heading into today. Given the mixed returns, they are also all over the place regarding their trading ranges, although most finished yesterday below their 50-day moving averages. The outliers were JPMorgan Chase (JPM) and Citigroup (C).
All six of the banks scheduled to report this morning have now hit the tape, and at the headline level, the results were positive relative to expectations. Wells Fargo (WFC) is the only one of the six not to exceed sales results, and all six exceeded their profit forecasts. Given the better-than-expected results, all of them are trading higher in the pre-market with gains ranging from over 3% for WFC to JPM, which is up just fractionally.
The positive results have set the market up for a positive start to the trading day, but we still had to get through the December CPI report. Economists expected the headline reading to increase 0.4% m/m, with the core reading expected to rise 0.3%. At the headline level, the report was right in line with expectations while the core reading came in a tenth lower at 0.2% in what was the first weaker-than-expected core reading since the June report on 7/11/24. In response to the report, equity futures have built on their pre-market gains while the 10-year yield dropped down to 4.70%.
The Closer – PPI, BNPL, Freight – 1/14/25
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we begin with an overview of the latest PPI data (page 1) followed by a look into buy now, pay later lending markets (pages 2 and 3). We then finish with a look into freight volumes (page 4).
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Daily Sector Snapshot — 1/14/25
Small Business Expectations vs. Reality
This morning’s release of the NFIB’s Small Business Optimism Index for the month of December was expected to fall down to 101.4 versus a reading of 101.7 in November. However, the politically sensitive report has continued to surge following the election. The index rose all the way up to 105.1 to set the highest reading since October 2018. As shown below, small businesses have gone from being extreme pessimists six months ago to extreme optimists today.
Small business optimism has now surged 11.4 points since the October report, which is a record two-month increase in the history of the survey going back to 1986. As shown below, the only 2-month increases that even come close were a comparable 10.9 point increase in the wake of the 2016 election, a 9.7 point rebound in June 2020 after the worst of COVID lockdowns, and an 8.9 point jump in March 1991.
In the table below, we provide a breakdown of the levels of each category of the report in December as well as the month-over-month change and how those all rank as percentiles of their respective historical range. Obviously given the surge in the headline number, there were multiple categories that saw top decile month-over-month jumps in December.
As shown in the table above, the single largest jump of any category was for expectations for the economy to improve (the outlook for general business conditions). That index rose 16 points to reach the second highest level on record. The current reading is only one point below the record of 53 set in March 2002.
As the outlook for the economy improved dramatically, small businesses are increasingly thinking it’s now a good time to expand. As shown below, 20% of firms reported that they view the next three months as a good time to expand. That is the highest share of the post-COVID era.
The NFIB provides a breakdown of the reasons small businesses have for their current expansion outlooks. For those with a negative outlook, 19% report that it is due to economic conditions with an identical percentage for those reporting an uncertain outlook. In both cases, those were the most common reasons given. Alternatively, for those that gave a positive expansion outlook, only 4% reported it was due to the economy whereas an overwhelming 10% indicated it was due to the political climate. In other words, small businesses see now as a good time largely due to changes in the political, rather than economic, landscape.
As we have frequently noted in the past, one downside to the NFIB survey is the presence of extremely strong political biases, especially in the past few election cycles. Historically, the index and its components have been stronger during Republican administrations and weaker during Democrat administrations, hence the recent surge following President Trump’s win this past November. With that said, certain categories of the report (which we highlighted in today’s Morning Lineup) have tended to be less politically sensitive.
In the charts below we standardize and average across the individual categories of the report those that measure “actual” changes to the businesses (i.e. – actual earnings changes, actual sales changes, actual employment changes, etc.) versus those that survey on “expectations” or “plans” (i.e. – hiring plans, expect economy to improve, etc.). As shown, while both indices for expectations and actuals have risen significantly in the past couple of months, it’s the former that has seen the more pronounced move. As a result, the spread between expectations and actuals hit a record high in December. That means in the history of the survey, there has never been a time in which small businesses reported stronger optimism and expectations relative to what they have actually reported is going on within their businesses.
