Goldman Made More Lending to Investors Than Trading for Them, While JPMorgan Held Back on Buybacks

$3.37 billion.

That is how much revenue Goldman Sachs (GS) brought in last quarter from lending to stock-market clients such as hedge funds. The figure was a record, up 96% from a year ago, the bank said. It beat the $3.08 billion Goldman made helping them trade.

Trading fell from the spring. The lending held up. Goldman also said its list of pending deals shrank from June. Its shares rose about 4% before the open, then ended about flat. In its stock business, Goldman's lending to investors now out-earns trading for them.

• Big banks kicked off earnings. JPMorgan missed profit forecasts and closed down about 0.9%. Wells Fargo (WFC) fell about 3% after revenue fell short. Citigroup (C) beat forecasts but fell.
• The S&P 500 ended about flat, and the Dow fell 0.35%. Micron (MU) lost 3.6%, a second straight drop since a Chinese rival's chip news.
• The 10-year yield was near 5.22% Tuesday afternoon. September CPI is out at 8:30 a.m. Wednesday.
• Brent settled near $106, down about 1%. ASML, Bank of America and Morgan Stanley report Wednesday.

JPMorgan Bought Back Far Less Stock and Raised Its Outlook for Interest Income.

This morning, PMD said money is choosing, and it charges more. On Tuesday, the banks showed how they choose. JPMorgan (JPM) bought back a net $664 million of its own stock. In the spring, it bought back a net $6.2 billion. "In line with our hierarchy, we reduced share repurchases this quarter," Jamie Dimon said. He said the bank can use that money later "at very attractive returns."

The bank also raised its forecast for this year's net interest income, to about $106 billion. It also gave a first, higher figure for 2027, excluding its markets unit. Its wholesale loans reached about $939 billion, up 16% in a year.

The quarter still missed forecasts. Profit was $5.57 a share. About half the miss came from losses on securities the bank chose to sell. Dimon warned that deficits, inflation and rising rates "continue to shift under the surface."

Goldman kept buying back stock, about $3 billion of it. Its loans grew about 6% from June. Its capital ratio fell to 12.4%, from 12.9%.

JPMorgan Is Holding Capital to Deploy Later

For JPMorgan's owners, this may mean fewer buybacks while the bank lends more at higher rates. That could lift income, as it forecast. It could also leave less room if loans go bad. Bank of America and Morgan Stanley show on Wednesday whether others make the same choice.

SIGNAL 1: Goldman Took Losses on Some Loans to Companies. It Did Not Name the Borrowers.

Goldman set aside $368 million for bad loans. Most of it covered loans to companies and other big clients. It did not name the borrowers. Its finance chief called them "highly idiosyncratic" and unrelated to one another. He said they were not "necessarily the signal of something else to come." Loan growth also added to the total. Citigroup set aside more for losses overall, but mainly for cards and a weaker view of the economy. It set aside less for business loans.

The Financial Stability Board, which advises the G20, wrote to finance chiefs this week. It flagged weak spots in private credit. It also named bond-market swings and AI risks. No bank tied Tuesday's losses to private credit.

What resolves this

Filings may say which industries the bad loans sit in. Wednesday's bank reports will show if others see the same.

SIGNAL 2: Regulators Say the Stablecoin Market Has Not Grown in a Year.

The same board puts stablecoins at about $300 billion as of mid-2026. That is "essentially unchanged from a year earlier," it wrote. About 99% is tied to the dollar. Its main worry is tokens backed by cash held in several countries. In a rush to cash out, the money may sit in the wrong place.

The board set no new rules. Private trackers count stablecoins their own way, so their totals may not match.

What resolves this

The G20 meets Thursday. Its statement will show if ministers back one rule on where reserves sit. Circle reports on Nov. 4.

SIGNAL 3: Humana Swapped Its Clinic Partner for BlackRock's HPS. Humana Has Not Sized BlackRock's Protections.

BlackRock's private-credit arm, HPS, will take over a buyout firm's stake in about 150 Humana clinics. Humana valued the stake, held by Welsh, Carson, Anderson & Stowe, at about $2.8 billion. That is the stake's value, not cash paid to Humana. BlackRock (BLK) will own most of the new venture. CenterWell, the Humana (HUM) unit that runs the clinics, keeps a smaller stake.

The old ventures had puts that could force Humana to buy out its partner. The new one has none. Humana expects a significant cut in its liabilities and a much lower cost of capital. In return, BlackRock gets "certain protections." A Humana filing calls them minimum-return protections. It did not give their size.

What resolves this

The deal is set to close this quarter, pending approvals. Humana's filings after that should size the liability cut and BlackRock's protections. BlackRock reports Wednesday before the open.

• Polymarket's odds of a U.S. strike on Yemen by Oct. 31 fell to about 18.5% early Tuesday. On Monday they were near 20.5%. By 8 a.m., they were near 14.5%. That came after the Saudi-led coalition told civilians to leave a Sanaa fuel depot. Houthi media later reported a strike there. Saudi strikes do not count under the contract's rules, and the market is thin.
• Goldman's capital ratio now sits about 1 point above its required level, its bosses said. If loans keep growing, that leaves less room for buybacks.
• Goldman's consumer unit lost 72% of its revenue from a year ago. Markdowns on its Apple Card loans drove the drop.

Private Market Trends Driving Public Market Moves

The banks are steering their money into loans, and the risk travels with it.

Goldman's record lending to investors and JPMorgan's smaller buybacks are the same choice. For the banks, that could lift income if rates stay high. It also puts more of their money behind loans to companies, where Goldman's losses showed up. If more of those go bad, buybacks could shrink at more banks. At Humana's clinics, the risk moved too. BlackRock's private-credit arm took the majority, with protections, and the put on Humana went away. Wednesday's CPI is the first test of how long rates stay high.