In some ways, being an investment banker is like being a surfer — only the waves are made of things like underwriting and M&A rather than water molecules.

After two years of diminishing returns that felt like trying to hang ten in landlocked Iowa, 2024 marked something of an investment banker return to Oahu (where many Wall Street traders are probably on post-Christmas vacation right now, thanks to those good waves earlier this year).

The next two years might be even better.

From Lucky to Luckier

Prior to 2024, total investment banking revenue at JPMorgan, Goldman Sachs, Bank of America, Citigroup, and Morgan Stanley fell for two years in a row — from a $48.9 billion peak in 2021 down to $22.9 billion last year. That was thanks (or no thanks, the C-suite might say) to the higher interest-rate environment that stunted dealmaking.

As the dealmaking environment improved — a tip of the hat to the usual suspects, the bull market and interest-rate cuts — investment bankers reaped a windfall. Based on data through the third quarter, Wells Fargo analysts forecast investment banking revenues at the five major banks mentioned above to reach $29.4 billion this year and grow to $34 billion in 2026. Overall global investment banking revenue, meanwhile, rose 27% in the first nine months of 2024, according to Dealogic data. The renewed need for their advisory services was pretty straightforward:

• Bain & Company said earlier this month that global M&A will reach $3.5 trillion this year, up 15% year over year and back to mid-2010s levels. Those deals need investment banks — when confectionery giant Mars snapped up every can of Pringles in a $36 billion deal for its snack company parent, Kellanova, Citigroup and JPMorgan Chase provided $29 billion in debt financing. When son-of-a-billionaire David Ellison’s Skydance Media agreed to merge with Paramount, it tapped Bank of America as an advisor.
• Revenue from investment banking fees rose 56% year over year at Morgan Stanley in the third quarter and an average of 30% at Goldman Sachs, JPMorgan, Bank of America, and Citigroup, according to Wells Fargo analysts. S&P Global’s Coalition Greenwich estimates revenue from the sector at the 12 largest global investment banks will rise 30% in full year 2024.

Feeling Good, Feeling Better: The denizens of Wall Street are, unsurprisingly, feeling good, too: A survey of 1,700 financial services professionals by eFinancialCareers found the average respondent expects a 50% increase to their bonus this year (congrats if that’s you reading this). They could soon feel even better: With deregulation-friendly President-elect Donald Trump set to retake office, Coalition Greenwich predicts global investment banking income could rise 5.7% to $316 billion next year — with $27.6 billion in fees for M&A alone.

Luxury brands were riding the subway instead of lounging in limos this year. 

Early in 2024, it became obvious that frugal consumer sentiment in China was going to be a big problem, and big luxury conglomerates including LVMH and Kering suffered eroding share prices as the year wore on. There were a couple of luxury names able to buck the trend. Their secret? Cultivate as much exclusivity as possible. 

So Not Hot Right Now

Together, LVMH and Kering own just about every brand that gets name-dropped in The Devil Wears Prada — except for Prada itself. LVMH owns Dior, Bulgari, and Tiffany & Co., plus premier champagne house Moët & Chandon, which produces Dom Perignon. Kering’s stable holds Gucci, Yves Saint Laurent, and Balenciaga. In October, LVMH reported the first sales drop at its core fashion and leather goods business since 2020, sending it into a somewhat gloomy holiday period. LVMH’s share price reached a peak in March this year, but has tumbled around 30% since. Kering’s stock also peaked in the first quarter, but fell a staggering 49% afterward. 

While luxury stocks may be going through hard times overall, some brands managed to swim against the current:

• Hermès consistently outperformed its luxury brethren — although its success is somewhat qualified since it, too, saw its share price peak in March. One secret to its success is that it makes consumers put themselves on waiting lists for its famous Birkin bags, meaning even when consumers feel the pinch, there’s a pipeline of people waiting to buy.
• It’s not just the fashion business where “treat ‘em mean, keep ‘em keen” paid off this year. Ferrari managed to speed past rivals because it only sells about 14,000 cars a year, so even when big markets like China contract, there’s plenty of demand for its high-margin business.

Diamonds Are For… Oh, Wait: You can’t get much more luxurious than diamonds, but despite their tough nature, the natural diamond industry took a few knocks this year. Mining company Anglo American has spent the year trying to offload diamond giant De Beers, and even cut diamond production in July in response to weaker demand from China.

There were plenty of business losers in 2024, but only one for whom the sky was literally falling.

For the second time in half a decade, Boeing faced a worldwide grounding of its 737 MAX passenger plane after a mid-flight door blowout forced an emergency landing in January. Things only got worse from there. 

Clipped Wings

Boeing just can’t leave its past behind. A pair of fatal crashes that claimed 346 victims across five months in 2018 and 2019 cost the company tens of billions of dollars in fines, compensation, legal fees, and cancelled orders — concluding with a $2.5 billion settlement with the Department of Justice after the planemaker was charged with conspiracy to defraud Federal Aviation Administration safety inspectors. 

While Boeing’s entire MAX fleet was grounded for more than a year in that case, only a portion (737-9 MAX aircraft) were grounded this year. The Alaska Airlines incident wasn’t the last of Boeing’s nightmare fuel headlines. A tire fell from a jet shortly after taking off in San Francisco. A fiery engine malfunctioned over Texas. Rudder pedals became “stuck” after touching down in New Jersey. The FAA slapped Boeing with a three-month deadline to address serious quality control issues. And just this week, tragedy struck again as a 737-800 jet crashed in South Korea, killing 179 people.

By March, The New York Times got its hands on a leaked copy of the FAA’s audit of Boeing’s manufacturing process. And, well, aerophobes may seriously want to refrain from reading any further:

• In its report, the FAA found Boeing failed 33 of 89 specific audits, with the total instances of alleged non-compliance amounting to 97.
• Even more concerning were the instances in which workers used makeshift tools such as hotel room key cards and Dawn dish soap in their production process. We hope your holiday flying is over.

By the end of summer, Boeing faced another historic challenge: the first strike among its more than 30,000 Pacific Northwest-based machinists since 2008. The work stoppage lasted nearly two months, and concluded when workers won a 40% pay raise — well above Boeing’s initial 25% offer. Speaking of Boeing workers: Did we mention that not one but two former longtime employees-turned whistleblowers died this year while raising quality-control issues? 

Turbulence: Through the first three quarters of the year, Boeing lost around $7.7 billion — an amount expected to reach around $10 billion for all of 2024. Meanwhile, airlines were left reeling following the 737 MAX grounding earlier this year, all while backorders of Boeing planes stacked up. “This is not a 12-month issue. This is a two-decade issue,” United CEO Scott Kirby said about Boeing at an investor conference in March. In other words: When Boeing loses, well, so do the rest of us.