To The Moon

The third-quarter earnings season brought mixed results for major banks, both in the U.S. and Europe. A common theme, however, is the recovery in investment banking activity, which helped boost revenues for several financial heavyweights.

Bank Earnings Show Recovery in Investment Banking

Reports from $Citigroup(C)$ , Bank of America, and Goldman Sachs revealed robust gains in investment banking fees, continuing a trend seen with PMorgan Chase and Wells Fargo last week. Citigroup's investment banking fees rose 44% year over year, while Bank of America and Goldman Sachs saw increases of 18% and 20%, respectively.

ASML’s Surprise Early Report and Its Sector Impact

$ASML

In Europe, semiconductor equipment maker $ASML Holding NV(ASML)$ accidentally posted its third-quarter earnings a day early, sending shockwaves through the market. The results indicated that 2025 revenue could be up to 16% lower than expected, largely due to weaker demand outside of the AI chip sector…

- Stock Reaction: ASML shares plummeted 16% on the news, dragging down the broader semiconductor sector. Major players like $NVIDIA Corp(NVDA)$ , $Advanced Micro Devices(AMD)$ , and Applied Materials saw significant declines of 4.5%, 5.2%, and 11%, respectively.

• ASML’s Role: ASML is a critical supplier to the semiconductor industry, providing cutting-edge extreme ultraviolet lithography machines used by manufacturers like $Taiwan Semiconductor Manufacturing(TSM)$ , Intel, and Samsung. While demand for AI-related chips remains strong, the outlook for other semiconductor applications looks less promising.

Healthcare Earnings Send Mixed Signals

Meanwhile, the healthcare sector delivered mixed earnings results, with Walgreens Boots Alliance and UnitedHealth in focus.

- Walgreens: The pharmacy giant beat earnings expectations and announced a three-year cost-cutting plan, which includes closing around 1,200 pharmacies. Investors responded positively, pushing the stock up 16%.

Outlook for Investment Banking and Earnings Season

The strong recovery in investment banking fees offers hope for the financial sector as companies look to capitalize on lower borrowing costs and renewed economic confidence. However, challenges remain for banks like Citigroup, which is undergoing significant restructuring, and for sectors like **semiconductors**, which face unpredictable demand outside of AI applications.

The focus now turns to upcoming earnings reports from Morgan Stanley along with more financials and tech giants. Investors will be watching for signals on how corporate AI spending is translating into revenue, and whether the recovery in investment banking can sustain itself amid a still-uncertain macroeconomic environment.

Conclusion:

While banks generally reported a rebound in investment banking, concerns around restructuring (Citigroup) and weaker semiconductor demand (ASML) tempered the optimism. In healthcare, Walgreens gained on its cost-cutting plan, but UnitedHealth stumbled on higher claims, pulling down other insurance stocks and weighing on major indexes…

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This report is for informational purposes only and should not be construed as financial advice. Market conditions can change rapidly, and investors should consult a financial professional before making investment decisions. Past performance does not guarantee future results.