As earnings season is already off to a positive start for investment banking, could this signal a boon or a bust for the IPO market? As part of this morning's Chart of the Day, Yahoo Finance anchor Madison Mills outlines Moody's data that compares and contrasts the number IPO deals and their deal value as the market continues to climb out of the IPO drought seen in the past several years.
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This post was written by Luke Carberry Mogan.
Bank earnings kicking off with better than expected results, particularly in investment banking. What does this signal about deal making and IPO activity? For more, let's get to Yahoo Finance's Madison Mills. Hey, Maddie.
Hey, Brad. Thanks so much. So pulling up our chart of the day here. This comes from Moody's and they were taking a look at IPO activity heading into today's bank earnings and earnings season kicking off officially here. We got some positive numbers across the board from JP Morgan and Wells Fargo that are specific to deal making. So I'll get into that, but it really affirms the chart behind me here, right? You're taking a look at deal value and deal counts, so both the number of deals and the value coming from those deals. That's going to be your purple bar here. You can see a small uptick from a year prior. Also, the number of sheer deals up ever so slightly from a year prior, but still you can see obviously huge declines from those highs back in 2021. There's been a little bit of a pullback in IPOs and deal making broadly because of the Fed's rate hiking cycle among other things. Now the big question is, since the Fed is kicking off its rate cutting cycle, will we see a huge resurgence in deal making activity? Well, we got some clues about that from those bank earnings. Running through those numbers here, JP Morgan advisory fees up 10% to $847 million. That was above estimates to the tune of about a hundred million. Uh, this could be boding well for other deal making activity across other banks. Wells Fargo's number was huge here, okay? Investment banking fees up $180 million or 37%. So a huge potential upside there, not only in terms of what we've already seen over the past quarter, but what we could see here to come.