Big Banks report earnings, plus crypto plunges, stocks fall on US-China trade tensions

The stock market faces headwinds as US-China trade tensions escalate, impacting investor sentiment and causing a sell-off in crypto assets while driving demand for bonds. Major banks like JP Morgan, Goldman Sachs, City, and Wells Fargo released earnings, with JP Morgan reporting a 9% revenue increase to $47 billion and noting the economy's resilience despite trade uncertainties. Johnson & Johnson also exceeded expectations, raising its full-year revenue guidance and planning to spin off its orthopedics division within 18-24 months due to its lower growth and margins.

Bank earnings generally met expectations, with some reporting record revenues in trading and investment banking, and Wells Fargo seeing strong loan growth driven by consumer spending. However, a cautionary tone from some executives highlights elevated market risk and the potential for a pullback, even as the broader market has seen rallies. The IMF forecasts global growth at 3.2% for the year, noting that the impact of increased tariffs has been less severe than anticipated, partly due to new trade deals, exemptions, and the private sector's adaptability.

The discussion also delved into the future of wearable technology and personalized healthcare, with the CEO of Aura discussing their recent $900 million funding round. The company plans to invest in AI for health predictions, international expansion, and integrating its platform into the healthcare industry. Aura's technology aims to provide personalized, predictive health insights and behavioral guidance, envisioning a future where wearables act as a "doctor in your pocket" and a co-pilot for clinicians, making health a daily practice for everyone.

• US stock futures are falling due to escalating US-China trade tensions, leading to risk-off sentiment and a plunge in crypto assets, while driving investors to bonds.
• Big bank earnings from JP Morgan, Goldman Sachs, City, and Wells Fargo showed solid revenue growth, with JP Morgan's revenue up 9% to $47 billion in Q3.
• Johnson & Johnson exceeded Q3 earnings and sales expectations, raising its full-year revenue guidance and planning to separate its orthopedics business in 18-24 months.
• The IMF projects global growth at 3.2% for the year, with the impact of tariffs being less severe than expected due to new trade deals and private sector agility.
• Aura's CEO discussed a $900 million funding round for AI-driven health predictions, international expansion, and integration into the healthcare industry, aiming to make health a daily practice.

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Market Volatility and Trade Tensions [00:05]

• US stock futures are falling due to escalating US-China trade tensions.
• China is retaliating by sanctioning US units of a South Korean shipping giant.
• This has spurred risk-off sentiment, with investors flocking to bonds and crypto assets plunging.
• The market is also watching big bank earnings results.

This section highlights the immediate market impact of geopolitical tensions, with a clear shift towards safer assets and a downturn in riskier investments.

Investors flocking to bonds while crypto assets are plunging.

Q3 Bank Earnings and Economic Outlook [00:25]

• JP Morgan's revenue was up 9% to $47 billion in the third quarter.
• JP Morgan's traders and dealmakers beat estimates for the period.
• CEO Jaime Diamond stated the US economy is resilient but warned about uncertainty from trade, tariffs, and geopolitics.
• Goldman Sachs also cited a potential market pullback.
• Citigroup posted the best third quarter revenue, up 15% to $5.56 billion for market revenue.
• JP Morgan had a record third quarter for market revenue at $8.9 billion.
• BlackRock had a record quarter for iShares ETFs, private markets, and cash net flows, with total net flows of $25 billion.
• Goldman Sachs' trading and investment banking fees were higher, up over 42% year-over-year to $2.66 billion.
• Wells Fargo saw accelerating long loan growth, its strongest linked quarter in years, supported by a resilient consumer.
• Despite good quarters, investors are focused on the market outlook.

This segment details the financial performance of major banks, revealing strong results and revenue growth across the board, while also capturing executive concerns about future economic uncertainties.

JP Morgan's revenue up 9% to 47 billion in the third quarter.

CEO Jaime Diamond saying the US economy is resilient, but he did warn on uncertainty from trade, tariffs, and geopolitics.

Bank Performance and Investor Sentiment [04:09]

• Banks have had a great run this year and over the past 12 months, with the KBW bank index up about 24%.
• Attractive valuations and a new regulatory structure with fewer capital restrictions have contributed to optimism.
• Numbers were pretty good and mostly as expected.
• Mixed performance is seen, with some profit-taking by investors.
• Wells Fargo is performing well following the lifting of its regulatory cap, allowing for more business growth.
• The market expected these results, leading to mixed performances as investors take profits in a group that has acted well.

This part of the discussion analyzes the strong performance of the banking sector, attributing it to favorable valuations and regulatory changes, while also noting investor behavior like profit-taking.

The banks have had a great run this year, a great run over the past 12 months.

I think the numbers were pretty good. uh pretty much as expected.

Trade Policy Uncertainty and Market Impact [05:17]

• Trade tensions are a key driver for US financial markets.
• Stock futures indicate a lower open following a rally on Monday.
• Investors are tying the market rally to trade policy uncertainty.
• Stocks like Nvidia, AMD, and Tesla, which saw pullbacks on Friday and gains on Monday, are now experiencing pullbacks again.
• This questions the AI momentum and the rally around those specific stocks due to trade policy uncertainty.
• The trade deadline in November is a point of concern.

This section emphasizes the significant influence of trade policy on market movements, highlighting how uncertainty surrounding these issues can lead to immediate shifts in investor sentiment and stock performance.

Trade policy remains a key driver for US financial markets this year.

This really just puts into question this AI momentum, this rally that we've seen around those stocks specifically and what exactly this trade policy uncertainty means for the markets.

US-China Trade Dynamics and Market Volatility [06:56]

• China and US negotiators sometimes "play" each other, leading to agreements followed by "red tape retaliation."
• Examples include issues with magnets and rare earths, where materials needed for export to the US are not being provided.
• This situation is expected to continue playing out over time, rather than through large, sudden tariff enactments.
• Developments need to be parsed carefully, like the overnight sanctioning of a South Korean shipping company, which pulls South Korea into the conflict and is a shot at the US.
• Imposing port fees is also part of this back-and-forth.
• The S&P 500 has rallied as much as 40% since April trade issues, but the possibility of returning to earlier, more severe tariff situations (like the 145% tariffs and embargo in late April) exists if resolutions aren't found soon.

This discussion explores the nuanced and ongoing nature of the US-China trade conflict, suggesting a prolonged period of strategic maneuvers rather than dramatic escalations, and reminding investors to stay vigilant.

I think one of the problems is that the China and negotiators tend to play uh President Trump's negotiators and I think they agree to things and then we wind up seeing what I you know I like to refer to as red tape retaliation.

It is a shot at the US but also we were imposing port fees today so there is this back and forth going on that investors need to be aware of.

Global Growth Forecasts and Tariff Impact [09:52]

• The IMF released new growth forecasts as they prepare to meet in Washington.
• Global growth is holding steady despite major policy shifts.
• The IMF projects global growth at 3.2% this year and 3.1% next year.
• This is a downgrade of about 0.2 percentage points from the forecast a year earlier.
• The IMF still expects growth to remain steady.
• The increase in tariffs and their effect has been smaller than expected so far.
• This is attributed to new trade deals, multiple exemptions, and the private sector's agility in rerouting supply chains.
• Executives across various sectors have mitigated tariff impacts on their margins.

This segment focuses on the IMF's global economic outlook, indicating a stable growth trajectory despite policy shifts and acknowledging the resilience of businesses in managing the effects of tariffs.

Global growth is holding steady despite major policy shifts.

They now project global growth at 3.2% this year and 3.1% next year.

Trending Tickers: Johnson & Johnson, Oracle, AMD, General Motors [11:17]

• Johnson & Johnson: Beat Q3 earnings and sales expectations, raised full-year revenue guidance, and plans to separate its slower-growing orthopedics business within 18-24 months. The company is focusing on six key business areas, with orthopedics not being central.
• Oracle and AMD: Oracle Cloud Infrastructure will deploy 50,000 AMD graphics processors (Instinct MI4 chips) in the second half of the year. This signifies cloud companies increasingly using AMD GPUs as an alternative to Nvidia.
• General Motors: Took a $1.6 billion charge due to the expiration of government-funded subsidies, expecting EV sales to fall and reducing EV manufacturing. $1.2 billion of the charge is for EV capacity adjustments, and $400 million for termination fees and settlements.

This section provides updates on specific publicly traded companies, detailing their recent financial performance, strategic decisions, and technological deployments.

Johnson and Johnson beating expectations for earnings and sales in the third quarter.

Oracle Cloud Infrastructure announced it will deploy 50,000 AMD graphics processors starting in the second half of the year.

Aura's Funding, AI, and Healthcare Integration [13:10]

• Aura, a maker of wearable health trackers, completed a Series E funding round of over $900 million, valuing the company at $11 billion.
• The company expects $1 billion in sales this year and released a ceramic model for $499.
• Funding will be used for AI development, international expansion, and integrating into the healthcare industry (insurers, providers, clinicians).
• AI is crucial for accurate health predictions and inferences from continuously collected high-quality data.
• The mission is to make health a daily practice.

This part introduces Aura and its significant funding, outlining its strategic priorities for growth, particularly in leveraging AI and expanding its reach into the broader healthcare ecosystem.

Aura, the maker of the wearable health and fitness tracker Aura Ring, completed a series E funding round worth over $900 million that values the company at 11 billion.

Well, the first thing of course is AI. Uh it's no surprise that highquality data continuously collected is what's required to make really accurate predictions and inferences about your health.

AI-Powered Health Prediction and Personalized Medicine [15:21]

• Aura's "Symptom Radar" can predict health status in a couple of days by analyzing biometrics and identifying trends.
• This short-term prediction, based on personal baselines, has proven useful for individuals to manage their health proactively.
• By integrating data from the ring and external sources (like glucose monitors or blood biomarkers), Aura aims for longer-term predictions.
• The vision is a "doctor in your pocket," using a supercomputer in the phone and a device on the body to collect clinical-grade data.
• This AI will be personalized, custom to the individual, knowing their data, context, genotype, and phenotype.
• This future of medicine is personalized, predictive, and acts as a co-pilot for clinicians.

This section delves into the technical capabilities of Aura's AI, explaining how it provides predictive health insights and envisioning a future of highly personalized and preventative medicine.

So today, for example, uh Aura can look at your biometrics and make a prediction about your health status in a couple of days. The feature is called symptom radar.

The difference is is that this AI will be personalized to you. It'll be custom to you. It will know your data, your context, your genotype, your phenotype.

Managing Health Data and Wearable Form Factors [18:01]

• Aura's approach aims to be low-impact and recede into the background, avoiding constant reminders of mortality to prevent anxiety.
• The lack of a screen on the device contributes to this low-impact experience.
• While most users benefit, some may become overly obsessed with the data, reinforcing the need for balance.
• The company values balance and aims to empower users to drive their own health journeys.
• The future will likely involve a "cloud of wearables" suited for specific use cases (e.g., diabetic monitors, glasses interacting with rings).
• The ring is considered the best wearable form factor due to its sensor proximity to arterial blood flow, providing a stronger signal compared to the wrist.

This part addresses concerns about data-induced anxiety and discusses the evolving landscape of wearable technology, emphasizing the unique advantages of the ring form factor as a foundational device.

Philosophically I think our approach is that we want to recede into the background you know we don't want to be reminding you every day of your mortality and to you know create some anxiety.

The thing about the ring is that it's actually the best spot on your body to measure.

Accessibility and Future of Preventative Health [20:43]

• Increasing accessibility to premium health tracking tools like Aura is a key mission.
• Accessibility is being pursued through pre-tax funds (HSA, FSA) and partnerships with insurance companies.
• Insurers have an incentive to keep individuals healthy (life, health, Medicare Advantage, Medicare).
• Subsidizing access to the ring by insurers helps keep people healthy, reducing the burden on the healthcare system.
• The long-term goal is to bend the curve on healthcare costs by enabling preventative health decisions and building healthy habits early in life.

This concluding segment focuses on making advanced health technology accessible to a wider audience, highlighting strategies like insurance partnerships and leveraging preventative care to manage healthcare costs.

Access is key. Our our mission is to make health a daily practice and that's for everyone. Health is a fundamental human right.

If you can solve people's health problems before they get them, you reduce the burden on the system and and we all know that the cost of health it it it piles up at the end of life.