Two years ago, the major banks kicked off Q3 earnings season with some very troubling forecasts, which rattled the equity markets, leading to one of the more difficult days on Wall Street in recent memory. The impact of more restrictive Fed monetary policy had begun to take effect, and investment banks reported some deeply concerning forecasts for M&A, as dealmaking pipelines began to reflect what would be a prolonged dearth of transactions going into 2023 and beyond.  

What a difference two years can make!  

It’s exciting to see the optimism for dealmaking heading into 2025. The major banks kicked off Q3 earnings season today with a renewed sense of optimism for M&A, leading markets higher. Major increases in reported Q3-2024 dealmaking fees year-over-year, and, more importantly, robust dealmaking pipelines driving healthy forecasts into 2025, which has fueled financial valuations higher.  

Many have taken note recently of the historic pent-up demand for deals, and investment banks are reporting that the time has come for a much welcomed rebound. As we close out 2024, all signs indicate there is great reason for optimism, across all sectors, for a robust dealmaking market in 2025.  

Investors and business owners need to begin preparation now to capture the opportunity that lies ahead. Inorganic growth through mergers and acquisitions will be back in the headlines again moving forward, and investor expectations, after two long years of patience, are as high as ever.  

Morgan Stanley (MS) capped off third quarter earnings season for major banks, topping estimates and driving dealmaking fees higher by 56% to $1.4 billion. This earnings cycle has noted a rebound in dealmaking activity from top investment banks, particularly in Morgan Stanley's bond underwriting and M&A advisory units. "The dealmaking pipeline that's been announced over the last quarter's earnings release is a great sign for all of the sectors. But in particular for banking, you have a lot of pent-up demand for deals, as we saw a dearth of transactions in 2023," PwC US banking & capital markets deals leader Dan Goerlich tells Yahoo Finance.

https://finance.yahoo.com/video/whats-next-m-catalyst-investment-192704580.html?guccounter=1