Wall Street executives expressed caution about the economy during their third-quarter earnings announcements in mid-October. A week later, their concerns appear to have deepened.
Speaking at the Future Investment Initiative in Saudi Arabia, Goldman Sachs CEO David Solomon stated that there is significant uncertainty surrounding new deal making among CEOs. Goldman Sachs reported a 33% drop in profits for the third quarter, primarily due to corporate caution and a long-standing investment banking slump.
Executives who previously highlighted signs of recovery during the summer now anticipate that it will take longer for sustained gains to materialize.
Solomon also emphasized caution among CEOs regarding significant changes that could impact their businesses in uncertain times.
During their visit to Saudi Arabia, Wall Street figures such as JPMorgan Chase CEO Jamie Dimon, Citigroup CEO Jane Fraser, BlackRock CEO Larry Fink, and Bridgewater Associates founder Ray Dalio delivered fresh warnings about various concerns. These included a new conflict between Israel and Hamas, persistent inflation, the war in Ukraine, escalating tensions between the US and China, troubles in commercial real estate, and uncertainty surrounding the upcoming US presidential election.
Citigroup CEO Jane Fraser mentioned recent Hamas attacks in Israel and escalating tensions as factors that contribute to a sense of pessimism.
Fraser is currently overseeing a corporate restructuring that involves streamlining management and reducing staff.
In addition, BlackRock CEO Larry Fink highlighted the economic risks associated with new world conflicts and mentioned the impact of fear and instability on global contraction.
Jamie Dimon, CEO of JPMorgan, echoed his previous concerns about the current economic climate, emphasizing the importance of preparedness for potential risks. He also referenced central banks’ incorrect inflation predictions from 18 months ago.
Ray Dalio, founder of Bridgewater Associates, expressed similar worries about the effects of higher interest rates and the potential consequences of global monetary policies.
David Hollerith is a senior reporter for Yahoo Finance covering banking and crypto.
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