WSJ What’s News - Why Wall Street Is Firing on All Cylinders

Episode Date: October 14, 2025

P.M. Edition for Oct. 14. Major banks including Goldman Sachs and JPMorgan Chase exceeded third-quarter profit and revenue forecasts. WSJ banking and finance reporter Alexander Saeedy unpacks the results. Plus, WSJ’s Peter Grant explains why New York City’s office market is outpacing the rest of the country’s. And a youth-led revolt in Madagascar has resulted in a military coup. Sabrina Siddiqui hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

The latest results from big banks show Wall Street firing on all cylinders. Plus, why New York City's office market is soaring. Employers are getting their workers back to offices, and as a result, they need more space. And Gen Z protesters have felled another government as Madagascar's military seizes control. It's Tuesday, October 14th. I'm Sabrina Siddiqui for the Wall Street Journal, filling in for Alex Oscella. This is the PM edition of What's News, the top headlines and business stories that move the world today. In its latest forecast, the International Monetary Fund said the global economy is on pace to grow by 2.6% this year,

down from 3.6% growth last year. Tariffs, inflation, and other threats are clouding the world economic outlook. For the U.S. economy, its forecast is for 1.9% growth, slightly better than predicted. earlier this year, but down from 2.4% recorded in 2024. The IMF says the weakening U.S. labor market and protectionist trade policy are among the signals for potential problems ahead. But even with those concerns, Wall Street is surging. Dealmaking, trading, and corporate lending are gaining steam and fueling profits at the nation's biggest banks. Results out today from Goldman Sacks, J.P. Morgan, City Group, and Wells Fargo all beat profit and revenue forecasts as third

quarter earnings season got into full swing. Goldman is on pace for its best year ever in its main investment banking and markets division. J.P. Morgan is on track to make over $50 billion in annual profit for the second year in a row. And BlackRock, the investment management giant, is sitting on a record $13.5 trillion in assets under management. Alexander Saeedy, the Wall Street Journal's reporter covering banking and finance joins us now with more. Alex, Goldman, J.P. Morgan, City, all those banks seem to be benefiting from a booming Wall Street. How did that show in their results? Yeah, so all the three big banks reported profit and revenue that were beyond investors' expectations coming out of the sort of trade war uncertainty of the second quarter.

In the third quarter, a lot of banks' clients felt very confident, willing to make investments buy other companies, try to divest firms that they don't want to own anymore. And at the same time, the consumer is looking relatively healthy. So overall, the picture is looking okay. And banks stand to directly benefit from that. But shares in Goldman Sachs and JPMorgan fell. What is worrying investors? Investors had already been told that the results would be even better than they might have been expecting.

So, as one analyst put it to me, they may have gone in expecting two ice cream scoops and came away with one. J.P. Morgan, just as an example, is at very high valuations relative to where it's been in past years. So even moderately good news as opposed to excellent news could mean that the stock goes down a percentage point or two. But the outlook isn't clear cut. This is J.P. Morgan's CFO, Jeremy Barnum. You think about this moment as a moment of high uncertainty, I think tipping point. is a little bit too strong a word, but certainly as you look ahead, there are risks. Alex, what did the banks have to say about economic uncertainty? Well, it varies bank-to-bank, CEO, J.P. Morgan's Jamie Diamond, who's always been a skeptic,

continues to say he believes asset prices are elevated. There's a complex range of risks that are emerging, especially in geopolitics, that are difficult to quantify and hard to protect the bank against. But at the same time, in terms of real time impact, there's not a lot to say quite yet. The lower end of the consumer is stretched a little bit more than they were probably a year ago. If inflation comes back, that's going to dent everyone. So the outlook is relatively mixed, but the current state of the economy appears to be pretty good. That was the Wall Street Journal's Alexander Saidi. Thanks, Alex. Thank you. Federal Reserve Chair Jerome Powell highlighted weakness in the job market reinforcing investor

expectations that more interest rate cuts were coming. At an economics conference, Powell said the labor market has, quote, demonstrated pretty significant downside risks. Hopes for more rate cuts helped give U.S. stocks a boost along with signs that trade tensions between the U.S. and China were not, in fact, spiraling. Following a lower open, the Dow moved into positive territory after a top U.S. trade officials said President Trump and Chinese leader Xi Jinping are still on track to meet later this month. Indexes closed mixed, with the Dow up less than half a percent, the S&P 500 down 0.2%, and the NASDAQ

falling almost 0.8%. In commodities, gold prices hit yet another all-time high. Coming up, why New York City's office market is thriving while much of the country is plotting along. That's after the break. At the Nissan All In Clear Out, there's nothing more chill than financing an award-winning Nissan for just zero percent. Enjoy the soothing relaxation of zero stress, zero worries, zero indecision. Hurry in, because once they're gone, there will be zero left. During the Nissan All-In Clear Out, get zero percent financing plus up to $500 bonus on some of our best-selling models. You have zero reasons to wait.

Conditions apply, see your local Nissan deal. today. After weeks of demonstrations over corruption and worsening living standards in Madagascar, the country's armed forces say they have taken control and its president isn't hiding in an undisclosed location as he tries to regain power. The young protesters in this former French colony off the coast of southern Africa have described themselves as Gen Z. Mata. They say they are inspired by protests by young people in Nepal and elsewhere frustrated by a lack of opportunity. Some of those demonstrations have toppled governments. In Madagascar, protesters have flown the anime pirate flag that has appeared on the streets in Jakarta and other cities. Many say they

were spurred into action by frequent power outages, water shortages, deforestation, and the perception that corruption has worsened. In news from the Trump administration, the press, President has said a $20 billion lifeline for Argentina depends on President Javier Millet's success in the upcoming midterm elections. Trump's remarks come days after the U.S. said it purchased Argentine pesos and finalized the framework for a $20 billion currency swap with the country's central bank. That was an effort to stabilize markets and shore up the cash-strapped country's economy. Argentina is holding a midterm congressional election on October 26th that is widely seen

as a referendum on Millie's policies. is hoping to increase support in Congress, where his party currently has less than 15% of the seats to advance his free market overhaul. President Trump also announced a military strike on a boat off the coast of Venezuela that killed six people. The president said the boat was affiliated with a designated terrorist organization engaged in narco-trafficking, and he said that U.S. intelligence confirmed the boat was trafficking drugs. The administration has ordered several military actions against what it says are drug-trafficking boats in recent weeks.

It has faced questions from lawmakers on both sides of the aisle about the legal basis for the strikes. And in corporate news, General Motors is cutting back its electric vehicle manufacturing capacity and taking a $1.6 billion charge on that division. GM said today that it expects EV sales to decline because of the end of government subsidies and fuel efficiency mandates that had propelled growth.

consumer interest in EVs has already weakened, but there was still a rush of buyers before a $7,500 federal tax credit expired in September. GM saw a record level of EV sales in the third quarter, but automakers predict that the EV market will crater in the absence of the credit. And finally, New York City's office market is enjoying its biggest boom in nearly two decades. businesses added 23.2 million more square feet of office space in Manhattan during the first nine months of 2025, the largest amount for that stretch of time in 19 years. That's according to Real Estate Services firm, CBRE Group. Leasing activity in Manhattan has surpassed pre-pendemic levels, even while nationwide, office leasing remains about 11 percent below its pre-pendemic average.

And Manhattan developers are moving ahead with more than a half dozen new office projects the most at any point since the pandemic. The Wall Street Journal's Peter Grant joins me now to discuss, Peter, you report that Manhattan office space is leasing at a rate not seen since 2006. What is fueling the recovery? Well, New York has a diverse set of businesses, and a lot of them are doing well. Technology companies are expanding in New York. Amazon has done a bunch of new leases here, and you especially have financial services,

which are seeing a boom of M&A activity. IPO activity, and a lot of those companies are expanding. The other good thing for New York is has probably the highest return to office rates of any city in the country. Employers are getting their workers back to offices, and as a result, they need more space. New York's office market, as you just said, is leaving other cities in the dust. Why is that? What is unique about the city's office market? You have easier commutes to New York than other office markets.

And there's a direct correlation to the ease of a commute to how much people are returning to offices. Also, New York is known for its smaller apartments. Working from home isn't as much fun if you have to deal with roommates and your roommates' animals. And so if employers are making their offices more attractive, and a lot of them are doing this by adding amenities, then workers are more inclined to go to work. The new J.P. Morgan headquarters has sort of set a new standard in terms of amenities. It has numerous food offerings. It has meditation rooms, two gardens. And Jamie Diamond, the CEO, was communicating something to his employees, which is basically, you better be in the office.

I'm going to make the office nice, but you better be there. That same theme is beginning to permeate throughout the city. But the market is still far from fully healed. What are some of the lingering challenges? Well, the vacancy rate, New York, still has not returned to pre-pandemic levels. There's still a lot of empty space, and there are also a lot of obsolete buildings and distress buildings. So just as you're seeing a record number of deals being done at over $100 a square foot, you're also seeing numerous buildings that just can't attract tenants at all.

So it's not as if New York's problems with office are completely healed, but they're certainly moving in that direction. That was the Wall Street Journal's Peter Grant. Thank you, Peter. My pleasure. And that's what's news for this Tuesday afternoon. Today's show was produced by Pierre B. N.A. and Zoe Culkin were supervising producer Tali R. Bell. I'm Sabrina Sidiki for the Wall Street Journal. We'll be back with the new show tomorrow morning. Thanks for listening. Thank you.