For these investment banks, figures on trading and corporate deal activity will stand as important indicators on the health of financial markets. The third quarter, which includes the summer holidays, is often slower than other quarters of the year.
"We expect sluggish investment banking results with modest declines year over year and double-digit declines quarter over quarter," Macquarie analysts said in a Wednesday note. "Increased volatility has dampened the revenue outlook for mergers and acquisitions and equity capital markets," the latter of which includes companies' initial public offerings.
Guidance for capital markets activity will be particularly of interest, since IPO and corporate deal activity picked up at the end of the third quarter, after 2016 started sluggishly.
I'm "looking to see whether there are continued signs of momentum into year-end," said Devin Ryan, analyst at JMP Securities, which has a market perform rating on Goldman Sachs a market outperform rating on Morgan Stanley.
"The market's been a bit more resilient recently than earlier in the year," he said.
The value of global mergers and acquisitions, excluding spinoffs, was about $860.6 billion in this year's third quarter, up from roughly $736.6 billion in the first quarter, but down from around $1.1 trillion in the third quarter last year, according to Dealogic.
Renaissance Capital expects 30 to 40 more IPOs for the rest of the year, putting 2016 on track for more than 100 deals raising a total of more than $16 billion, according to a Sept. 30 note from the firm. But many challenges for the IPO market may arise in the next few months, given the presidential election, the usual trading slowdown around the holidays and a potential interest rate hike, Renaissance said.
"Even at the high end of our estimates, the 2016 U.S. IPO market will go down as the least active year since the financial crisis and will most likely trail both 2008 and 2009 in terms of proceeds raised," the note said.
Over the last three months, financials themselves are the second-best performers in the S&P 500. But the sector has struggled the whole year with moderate economic growth, lowered expectations for a U.S. Federal Reserve rate hike and one of the worst starts to a year for the U.S. stock market.