WSJ What’s News - What’s Behind Wall Street’s Bumper Year

Episode Date: December 12, 2025

P.M. Edition for Dec. 12. Leaders of JPMorgan Chase, Bank of America and Citigroup shared numbers that show that their banks’ Wall Street operations are on track to have one of their best years ever. WSJ Wall Street editor David Benoit discusses what’s driving it. Plus, in an interview with The Wall Street Journal, President Trump says he’s considering Kevin Warsh or Kevin Hassett to lead the Federal Reserve starting next year. And why have politicians, who just a few years ago were sounding the alarm about climate change, softened their warnings? We hear from WSJ chief economics commentator Greg Ip about what’s behind the shift. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Published by Capital Client Group, Inc. Why politicians have stopped talking about a climate crisis. Plus, what's driving one of Wall Street's best years ever? People are turning to their banks saying, hey, help me trade, help me borrow more money to trade. All that leads to record markets revenue. And President Trump says he's still deciding between two Kevins to lead the Federal Reserve next year. It's Friday, December 12th. I'm Alex Oslo for the Wall Street Journal.

This is the PM edition of What's News. the top headlines and business stories that move the world today. Major U.S. stock indexes fell today. The NASDAQ led the losses, dropping 1.7% after it was dragged down by Broadcom stock. The chipmaker dropped more than 11% and suffered its largest one-day market cap loss on record, losing $219 billion, according to Dow Jones' market data after its latest earnings report. The company posted a record $18 billion in sales, but raised questions about its sales forecasts and margins. Chief Executive Hock-Tan said Broadcom's fast-growing AI business has lower gross margins than other areas,

while its forecast for non-AI revenue for the current quarter was flat. The Dow dropped half a percent, and the S&P 500 lost 1.1%. Meanwhile, Bank of America notched a symbolic win today when its share price finally recovered from the 2008 financial crisis. closing at its first record high since November 2006. The shares are now up 25% this year and closed up 1.1% today at $55.14 a share. Bank of America isn't the only big bank having a great year. This year is wrapping up as one of the best years ever for Wall Street, based on comments from bank leaders at a Goldman Sachs conference this week.

For more on what's driving this, I'm joined by our Wall Street editor, David Benoit. David, a couple stats from today's story. Goldman Sachs CFO said it looked like the bank's second biggest year in history for banking fees. On the market side, J.P. Morkin's head of consumer banking was forecasting growth in the low teens from a year ago for trading revenues. What made this such a hot year in investment banking and trading for these big banks? I think you can basically say chaos works out pretty well for the banks on the investment banking fees that Goldman's talking about. This is going to wind up pretty much the second best year outside of 2021. for all M&A across the globe.

We've seen really big deals. We saw the buyout of electronic arts, the video game maker. We saw Google Buy Wiz, a security company. We've got the ongoing fun of Warner buyout from Netflix or whoever. The banks love those things. That's where they get their fees. And companies really jumped on. Donald Trump is going to approve deals.

This is our chance to strike. On the market side, again, I think you can pretty well point to the White House here. You look back in April, and we had a lot of, lot of turmoil in the markets because of liberation day, that's smoothed out. But we've had lots of questions about where the economy's going, questions about what the Fed is up to. All that stuff leads to people trading stocks. And stocks are at all time highs, right? We're closing it on Dow, $50,000. People are turning to their banks saying, hey, help me trade, help me borrow more money to trade. All that leads to record markets revenue.

How are these banks approaching getting new business in 2026? And how is that changing? So everyone is pretty cutthroat right now, right? They see all these fees out there and they're all trying to get them. We are seeing a lot of banks talk about we're ready to spend. We're ready to grow. We want to grow faster, which is kind of a different tone than we've heard for the last few years where it's sort of been like, we're doing okay. Don't worry about us.

I think the big sign from this conference was J.P. Morgan announced they're going to spend $105 billion in expenses next year, which is up like $10 billion from this year and like up 30-something billion from just a few years ago. This is money on AI. This is money on talent. This is money on just like putting it to more customer use. So this is pretty big stuff. We're ready to see a big year for banking in 2026. Again, depends on, you know, what happens in geopolitics and the rest of the world. But that's how they're feeling going into 2026 on the back of this big year. That was WSJ Wall Street editor, David Benoit. Thanks, David. Thanks for having me. In an Oval Office interview with the Wall Street Journal today, President Trump said he was leaning toward choosing either former Fed Governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the Federal Reserve next year.

Trump said that, quote, I think the two Kevins are great. Hassett has been viewed as the frontrunner after Trump said in recent weeks that he had already made up his mind about who should lead the central bank. He restated that today, but suggested he hasn't made a final decision. Trump also said that he thought the next Fed chair should consult with him on where to set interest rates and pushed for more rate cuts. Coming up, why a former Michigan football coach was arrested and what's flying off the shelves at Costco. That's after the break. Deloitte expects the space economy to reach $2 trillion by 2035. Jason Garzattis, CEO of Deloitte U.S., says that growth is fueled by data and its application.

application for businesses across industries. What's exciting is that the data and the analytic and the commercial application of the data will move to be more mainstream. It will be something that organizations of any size can benefit from the data that's being emitted from space that could be pertinent to their operation. Visit deloitte.com to learn how the space economy is creating new opportunities. In international news, Iranian Nobel Peace Prize laureate Narjas Mohammedi, was arrested at a public event today.

Her brother said she was violently detained in northeastern Iran while attending a memorial service. Mohamedi, who was awarded the prize in 2023, gained global attention for speaking out against the Iranian government's oppression of women and torture of dissidents. Iran's mission to the United Nations declined to comment on her arrest. And we're exclusively reporting that Chinese authorities last month

arrested dozens of Tibetans. In a rare act of defiance, they were protesting a gold mining project that threatened their livelihoods in a Tibetan autonomous area in Western China. That's according to Tibetan activists and Tibet's government in exile. As of yesterday, 11 of the protesters initially detained were still held. Chinese authorities didn't respond to a request for comment. One of the richest, most powerful institutions in college sports was upended this week,

when the head coach of the Michigan football team was fired and then charged with a felony count of home invasion and two misdemeanors, including stalking. The university had fired Sharon Moore, the former coach, on Wednesday, after an investigation found that he had had a sexual relationship with a female member of Michigan's football staff. Moore's lawyer said today that he was said to be released on a $25,000 bond. Whatever happened to the climate crisis? Over the past few years, high-profile names like Bill Gates and BlackRock CEO Larry Fink have sounded the alarm about the dangers of climate change.

But more recently, politicians and CEOs seem to have muted those alarms and soften their warnings. So what's changed? WSJ Chief Economics Commentator Greg Ip joins me now. Greg, the underlying facts around climate change, of course, have not changed. Carbon emissions are still rising. The climate's getting warmer. NASA said that 2024 was the hottest year on record. So why are we talking about climate change differently now?

Well, if you go back four or five years ago, we're not. when I think climate concerns were kind of at their peak. There was a different political and cultural milieu. Look at the term of President Biden. I mean, he comes in, you know, he's completely invested in the climate agenda, talks about the urgency of acting right away. He passes a couple of really big spending bills to try and do a number of things, including promoting green investment. But then right around that time, inflation takes off partly because of all the spending in the Biden packages, and Russia's invasion of Ukraine. And what you've seen since then is people's priorities have basically changed. Climate change is not something they're inclined to worry about when they're

more worried about their pocketbooks or their security, the security of their energy supply. And with the election of President Trump, I think a lot of folks, including CEOs like Black Rocks, Larry Fink, have sort of sense there's been a shift in the political wind. And they're talking about it differently and they're trying to downplay a lot of the things that they used to emphasize just a few years ago. So what does that mean for the prospect of combating climate change? Well, obviously, a lot of policies that would have been helpful in terms of accelerating the move to net zero emissions, like a carbon tax, become even harder to enact now. Although, you know, as somebody who has been pushing for a carbon tax for decades, I have to admit that that cause was lost ages ago.

Then what do you see as more likely to happen against climate change? First of all, given the technological progress that we've made on low emissions technology, and I'm talking about wind, I'm talking about solar, I'm talking about battery storage, I'm talking about promising developments in advanced nuclear. Emissions are likely to head downwards globally before long, and they've been heading downwards for the United States for some time, and that's likely to continue, almost irrespective of the policy landscape. The second thing is I think that as this sort of climate catastrophism,

which sort of consumed us a few years ago retreats, it gets replaced by a more kind of subtle, sober climate realism. Rather than focusing on the catastrophic outcomes and the need to change everything all at once right now, people focus instead on what's politically supportable and doable and what has a proven track record, which means things like incentivizing innovation in and commercialization of low-emissions technology.

That was WSJ Chief Economics commentator, Greg Ip. Thank you, Greg. Thanks for having me. Lots of companies are trying to mitigate the effects of tariffs for the holiday season. Costco's approach is to drop some items effect by tariffs and source more items from the U.S. That means it's selling a smaller assortment of products. One thing it's selling a lot of, food like pizza and pies.

As Costco chief financial officer Gary Miller-chip said on its latest earnings call, lots and lots of pies. Our U.S. bakeries also set a record in the three days leading up to Thanksgiving, selling 4.5 million pies. That's over 7,000 pies per warehouse over a three-day period. Costco's revenue topped forecast in its late. latest quarter, but shares were nearly unchanged today. Some analysts say investors may be hungry for a special dividend. And that's what's news for this week. Tomorrow you can look out for our

weekly markets wrap-up, What's News and Markets? Then on Sunday, WSJ Chief China correspondent Lingling Wei answers questions about the technology race between the U.S. and China. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Biennamee with supervising producer Tali Arbell. Michael LaValle wrote our theme music. Jessica Fenton is our technical manager. Ishael-Muslim is our development producer. Chris Zinsley is our deputy editor, and Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osala. Thanks for listening. Finding a home is like dating.

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