For the first time in recent memory, Main Street borrowing and spending has been a bigger driver of earnings than Wall Street's trading.
JPMorgan Chase, Goldman Sachs and Citigroup have all reported double-digit declines in trading revenues for the last quarter, as volatility or lack thereof created a void of demand for buying and selling, especially fixed-income securities. While Goldman CFO Harvey Schwartz called a bottom in the activity, which has slowed during the extended period of low interest rates, investors have shifted their focus to other, stronger parts of the banks' bottom lines.
In JPMorgan's case, the bank is seeing client assets rise sharply, and consumer confidence spurs more spending across credit and debit cards. CFO Marianne Lake said she sees high single-digit growth in spending on items like groceries and gas, and double-digit growth in spending on discretionary items like travel and retail.
"Across the board, consumers are spending healthily in all categories," Lake told investors on a conference call.