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The Wall Street banker gets jam tomorrow, and yesterday it’s jam, but today it’s not that much. On Wednesday, the Jefferies Financial Group confirmed what most executives and investors are already feeling.
Jeffries is odd among financial companies. As the fiscal year begins on December 1st, quarterly revenues are displayed one month before your rivals. Such paradoxicality is his privilege, as Jeffries’ chief rich handler is one of Wall Street’s longest extended CEOs.
Timing aside, Jeffries is the only US trading and trading home that is not even a bank. JPMorgan, Bank of America, Citigroup, Morgan Stanley and Goldman Sachs run other huge businesses such as Wealth Management and Deposit-Taking. Approximately $9 for every $10 of Jeffries’ revenue comes from transactions with investment banks. At JPMorgan, the share is similar to $2.
Given these habits, it’s no surprise that the company is seen as a precursor to Wall Street property. So, the latest quarter has a disappointing show where you get sick for your peers. According to Visible Alpha, Jefferies said it generated $1.6 billion in revenue on Wednesday.
It’s an early indication that 2025 is not going as planned. The White House changes were to unlock the list and acquisitions for Wall Street’s profits. Instead, uncertainty and tariffs tested the client’s VIM. Jeffries’ advisory costs rose 17%, with half of analysts forecasting. Equity underwriting has shrunk by 39%, twice as much as the market burned.
Other pillars of high finance, trading, have lost momentum. Jeffries’ revenues from equity and bond flipping fell by 4%. JPMorgan expects that market business growth will be half as compared to last quarter in some of its products. Trading is a big profiter. Last year, Wall Street’s record won a bonus of $47.5 billion. Disappointment is widespread.
Jeffries is often seen as a pioneer, but when things go well, it definitely should be an outperformer. The company has been hiring actively – since 2019 it has increased its managing director executives by 70%. Jeffries is particularly skewed into private equity companies that still have around 1.2tn of unused funds to deploy.
And what remains must eventually rise. Global investment bank fees are below the historic average. According to LSEG, Tally, which is less than last year’s total, the 161 mergers were announced this year. It’s hard to imagine executives not expanding into their minds as much as the market conditions allow.
It may, after all, not support the Wall Street rainmakers who are rewarding today’s outcomes than tomorrow’s outcomes. They were primarily hoping to provide oversized help in 2025. That’s no longer possible, but hopefully there will still be enough jam to feed them well.
john.foley@ft.com
