In the wake of Covid, Wall Street enjoyed an unprecedented era of acquisitions. The same went for initial public offerings (IPOs) in the form of “blank check” or special-purpose acquisition companies (SPACs).

That activity flooded the market with massive amounts of cash.

During this “Everything Bubble,” every asset class – from equities to bonds, housing to cryptocurrency – saw dramatic price increases. And many employees at America’s banking institutions were working around the clock to keep up with it all.

More than one financial institution naturally met the new demand standard with hiring frenzies.

Unfortunately, all bubbles are destined to pop, and this one is no different.

As soaring inflation and recession fears rock the economy, appetites for IPOs and acquisitions have decreased. So Wall Street now faces a crisis of over-extended baking entities.

The New York Post has this to say on the matter:

“At an industry luncheon last week with executives from top banks including JPMorgan and Morgan Stanley, chatter was dominated by speculation that layoffs will ravage the industry’s workforce by at least 10% – and that the bloodbath could be in full swing by year’s end, sources told the Post.

“‘The conversation was all about when people think hiring freezes will happen and when the layoffs are coming,’ a source with knowledge told The Post.”

In fact, just last month, JPMorgan (JPM) began laying off several hundred employees within its mortgage brokerage. It cited “cyclical changes” as the reason.

As I reported last week, both JPMorgan Chase and Morgan Stanley (MS) divulged steep decreases in profits. With its earnings slumped 20%, JPM specifically is freezing share buybacks and setting aside $428 million for possible loan losses.

This, of course, isn’t exactly an optimistic strategy by the nation’s biggest banking institution. If its estimations are on target, the equities industry is in for a bumpy few quarters.

When exactly the ax will fall on excess employees is yet to be determined. Since many of the big banks are still battling their ruthless reputations, some suspect they’ll hold off on the human capital carnage until fall.

Others might be still holding out for an economic rebound.

More Non-REIT News to Know About

It hasn’t exactly been the best year for the airline industry. Obviously.

In contrast to the banking realm, many airlines are understaffed, causing a season of summer chaos with flights canceled left and right. However, even in the pandemonium of this pandemic-driven disarray, Delta Air Lines (DAL) has found a way to be proactive…

And Boeing (BA) has found a way to benefit.

Yesterday, the Atlanta, Georgia-based Delta announced it’s purchasing 100 brand-new Boeing 737 MAX jets. This is a huge win for Boeing as it tries to gain ground on its European counterpart, Airbus SE.

After the 737 MAX was grounded for nearly two years in the wake of two fatal crashes, Airbus picked up demand. So it powered past Boeing during the pandemic.

Delta’s 100-plane purchase is worth a whopping $13.5 billion – if it goes through. It still needs regulatory approval, as several cockpit upgrades to this particular plane haven’t yet been certified by aviation agencies.

As such, Boeing is prepared to ask for an extension if these approvals aren’t met in a timely fashion. But one way or the other, this sign of renewed confidence is probably a positive one.

Interestingly, Boeing’s stock has seen a steady incline in the last month, moving up 8%. Yet it fell $0.02 directly following this new purchase order.

Strange.

The World According to REITs

I’m going to start right off the bat by saying that I have Equity LifeStyle Properties (ELS) as a Hold. But it still did report its quarterly earnings, so that’s what I want to talk about today.

This real estate investment trust (REIT) deals in manufactured home properties – 423 of them, to be precise, located in 33 states and British Columbia.

To quote BusinessWire:

“For the quarter ended June 30, 2022, total [revenue] increased $35.2 million, or 10.7%, to $365.3 million, compared to $330.1 million for the same period in 2021… net income available for common stockholders increased $0.4 million, to $61.5 million, or $0.33 per common share, compared to $61.1 million, or $0.33 per common share, for the same period in 2021.”

So not too shabby. And things also improved in the half-year department.

But what about the next half?

Well, the REIT “acknowledges the existence of volatile economic conditions” going forward. But considering the continuing housing situation, this company could continue to see its revenue climb.

After all, to quote Zacks this time, ELS:

“… came out with quarterly funds from operations (FFO) of $0.64 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.61 per share a year ago. These figures are adjusted for non-recurring items.

“A quarter ago, it was expected that this resort community operator would post FFO of $0.70 per share when it actually produced FFO of $0.72, delivering a surprise of 2.86%.

“Over the past four quarters, the company has surpassed consensus FFO estimates three times.”

Again, that’s not a bad track record. But don’t forget about my author’s note down below…

Author’s Note: If you do determine this stock is right for you, make sure to purchase it at a smart entry point. Even the best of companies can burn you badly by buying in at inflated prices.

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