| Welcome to Bw Daily, the Bloomberg Businessweek newsletter, where we'll bring you interesting voices, great reporting and the magazine's usual charm every weekday. Let us know what you think by emailing our editor here! If this has been forwarded to you, click here to sign up. Will investment banking ever come back? The short answer is: eventually, hopefully. Dealmakers around the globe sure want it to be sooner rather than later. Morgan Stanley's James Gorman views the market for dealmaking as "very subdued," the chief executive officer told analysts in a conference call this week after reporting first-quarter results. He and his rivals said investment banking fees have dropped about 20% or more from a year earlier.  James Gorman, chairman and CEO of Morgan Stanley. Photographer: Hollie Adams/Bloomberg "These are revenues delayed, not dead," Gorman said. "That said, it largely remains a back-half 2023 and full-year 2024 story." That means it could be a long year for investment bankers. Headcount has risen at four out of five of the biggest US banks, and the slumping fees create questions about whether more dealmakers' jobs will need to be cut if the pressures persist for that long. What's more, many thousands of young bankers are set to descend on the industry in the coming months. Will they have jobs coming out of their internships? And is a recession on the way, and how deep will it be? Some megamergers have been announced this year, including Pfizer Inc.'s $43 billion deal to buy Seagen Inc. We've seen companies that would otherwise go public sell themselves instead. But those are just glimmers of hope amid one of the worst quarters for deals in the past decade, according to my colleagues at Bloomberg Deals. We've previously reported, too, that young bankers who previously would've worked on mergers have been allocated to jobs doing restructuring or helping corporate clients clean up their balance sheets. (Very enticing, I know.) One positive sign for dealmakers is the pent-up demand from big private equity firms sitting on tons of cash. Blackstone Inc.'s Jon Gray, who's president of the largest alternative asset manager in the world, says his firm has a record amount of unspent money. That's almost $200 billion that can be put to work. "It's going to take some stability in markets, certainly getting past this inflation," he says. "Hopefully it happens in the back half of the year, I think at the latest, at the early part of next year." Trading Plays Don't feel too bad for the bankers. The big institutions have made huge windfalls from their trading businesses—the people who intermediate the buying and selling of stocks, bonds, commodities and other assets—throughout the post-pandemic years. Really, really big money. But trading has been under more pressure this year, particularly in equities, where there have been very few IPOs and therefore a smaller supply of fresh stocks to sell. Morgan Stanley is typically the powerhouse in that business. For the first quarter it missed expectations, as did almost every other bank except Goldman Sachs, which came out on top for the first three months of the year. That shows competition is heating up as the big banks deal with high-flying hedge funds and other investors around the world. In fixed income, Goldman missed expectations after having a blowout performance a year ago. (The very, very volatile commodities markets have calmed down since the initial whipsawing that came on the heels of Russia's invasion of Ukraine.) As for the other big banks, JPMorgan Chase & Co.—which brought in almost $6 billion for that fixed income trading business alone—Bank of America, Citigroup and Morgan Stanley all came in above what Wall Street analysts had expected. This all goes to show: Wall Street is still making money. Even when times get tougher. And that's it for big bank earnings. A slew of regional banks also posted results this week, with many showing that the industry is starting to stabilize, even as deposit flights continue and revenue remains under pressure. On Monday, First Republic (which took in $30 billion of deposits from the biggest banks in a rescue plan) is reporting its results. It's hard to say the industry is out of the woods until investors know that this bank is safe. Huge week ahead, and I hope you'll follow us throughout. —Sonali Basak, Bloomberg Television's global finance correspondent | 
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