Credit Suisse has a new version of its CS Markets Index, which tracks trading revenues across Wall Street, and it is not a pretty sight for America’s top investment banks.
In a note out October 3, research analyst Susan Roth Katzke and her team set out their expectations for third quarter trading revenues, with Katzke and company forecasting a 15% to 20% decline year-over-year. That echoes commentary from bank executives, with Citigroup CFO John Gerspach saying the bank was on pace for a 15% year-over-year decline in trading revenues. JPMorgan chief Jamie Dimon said the bank was on track for a 20% decline.
The scale of the decline in fixed income, currencies, and commodities revenues is pretty brutal. The biggest business in FICC, G10 rates, is forecast down down by as much as 50% versus the same period a year earlier. Ouch.
The Credit Suisse team also set out their expectations for individual banks, forecasting a 23% decline in sales and trading revenues across FICC and equities at Goldman Sachs. It’s now forecasting a $US2 billion drop in trading revenues at Goldman Sachs from 2016 to 2017.