(Bloomberg) -- Earnings from Jefferies topped estimates. It’s a relatively positive signal for a group that’s fared worse this year than the S&P 500, beset by concerns about a weakening economy, slower lending and slumping capital markets. Even so, the results are unlikely to offer much of a boost as gloom about the market hangs over the sector.
The bank’s revenue fell, but not as much as anticipated. And the board added to its buyback authorization. Still, investment banking was terrible. Revenue sank 44%. Jefferies says it’s working with clients to support them “when economic and market conditions improve, and new issue activity opens up.” Backlog was consistent with last quarter’s levels, but “realization remains dependent on market conditions.” That says it all for the big banks due to report in about two weeks.
Plus, bank stocks have been atypically falling with higher yields, as the Fed’s unusual moves have broken the typical relationship between bank stocks and bond yields, as my colleague Matt Turner wrote recently. And there’s little cheer in the IPO darkness. Debuts vanished in the third quarter, with US new issues at the lightest for the quarter since the 2008 crisis. Porsche is an exception that offers little comfort to the broader market.
Bank stocks fell as much as 2.9%.
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