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More big banks out this morning with earnings. Goldman Sachs topping estimates in the second quarter after its profit rose from a year ago. The big banks saw revenue climb 17%, including a 21% jump in investment banking fees year over year. For more on these results, let's bring in Devin Ryan, who's the Citizens JMP managing director and director of financial technology research, joining us now. Great to have you here with us this morning. I just want to get your kind of reading analysis, perhaps more broad strokes of what we're seeing coming out early in this earnings season with regard to banks and if there's kind of a through line that we're able to draw thus far.

Sure, happy to, Brad. Um I think first off, just starting with Goldman since they just reported, a really nice quarter. You know, we were expecting them to report some improvement in revenue year over year. They had a um a 20% increase in investment banking, a little bit over 10% increase in trading. And so, I think that's kind of the common thread. You know, the capital markets businesses have been very good, you know, equity markets have been higher um thus far this year. So anything tied to fee businesses as well, like asset and wealth management, um are doing quite well. Goldman saw record results there, um in their management fees. And so I think those are kind of the common threads. I think if you take a step back, a little bit more mixed trends for banks on net interest income. Um and and that's something that we're continue to watch, kind of still the movement around, um you know, funding costs. But overall, I think it's been a pretty good start to earnings season and really the capital market-centric firms are shining. And I think we're still in the early days of a recovery in capital markets. So good to see the start, but I think there's a lot more to go here as we look out into future quarters of this year and then really into 2025.

Well, as Goldman recently announced this $20 billion private credit fund, and to the point that you're making, Devin, is the private asset management space within these banks positioning the and deciding the winners here? Are the banks that have private asset management really building now and prioritizing that, are they the ones that are the winners this cycle?

Yeah, Madison, it's a great question. And you know, we actually just wrote a report about this uh last week where we uh highlighted that Goldman Sachs um and some of the parts could be worth $565 in in our opinion, relatively conservatively. And a big piece of that was coming from the alternative asset management part of their business. So Goldman's raised about $300 billion of alternative assets um since the end of 2019, which is huge. It puts them in the top five of all kind of public alternative asset managers. And we think that's going to be an increasingly important part of their story. Only 60% of that money they've raised um or all their alternative assets are fee earning. But what happens is once those get invested and then start to earn incentive income when those investments start to generate good returns, there's kind of huge upside there. And so that's really beneficial both to earnings power, but also to the valuation of the business. And so that was what we highlighted in the report. I think some other companies are doing this, and then there's a much broader theme going on around private credit and how these firms are leaning in um into the markets. And you know, banks are working with some of these private credit firms as well. And so it's not all competition. I think there is opportunity for banks um with private credit as well.

Devin, when you think about the fixed income parts of these businesses as well, I mean, fixed income that came in higher than the estimate, I mean, it's pretty much to be expected though, right, as you're looking at no rate action in the US. So how how far out are you gaming the fixed income parts of these businesses to remain at these elevated levels, at least compared to estimates or year over year, until we get that pathway of rate cuts that really becomes clarified or solidified?

Yeah. I mean, it's fixed income and equities too, trading have been more resilient than we would have thought um heading into the year, and really even over the past couple of years, have been operating at terrific levels. I think you have to look at it kind of in the absolute sense and think, you know, there there is, what is the wallet share doing? And we still see room for growth in the overall wallet of fixed income, especially as you start to think about, you know, the issuance market is opening back up as M&A opens back up and you start to get financing around these deals, that creates a more active primary market, but that then spills into trading as well. So I still see room for for that to expand. And then if I look at Goldman Sachs specifically, we highlighted this in a report last week as well, they've gained tremendous market share in their trading businesses, and their entire global banking and market segment has increased market share by 350 basis points over their large bank peers since David Solomon took over. So a lot of that's coming from trading and some of that's the market share gains with clients, but then also leaning in on financing. So that's been a big theme for Goldman to really increase their durable financing revenues where in their prime brokerage they're lending money to their clients. So that's been a big opportunity for the firm. So they're gaining market share and growing faster than the market, but it is a good part of the market. And I actually think there's room for it to grow, even though it's been more resilient than we would have thought a year ago.