Goldman Sachs boss says that the capital markets are in an early stage of recovery.

Goldman Sachs’ chief executive hailed “the early innings of a recovery in capital markets and M&A” after the investment firm announced that its quarterly profit more than doubled from the previous year.

The American Investment Bank, one of most influential institutions within the mergers and acquistions world, announced profits of $3 billion for the three-month period ending June 30, up from $1.2billion a year ago. Resurgent dealmaking has boosted revenue to $12.7billion, up from $10.9billion last year.

Investment banks will see a drop in revenue by 2023 due to higher interest rates. This is because they are unable to attract new clients and delay stock market listings. Positive sentiment about the outlook of the US economy has led to a rise in fundraising in the debt and equity markets, and a surge in mergers and acquisitions.

Goldman Sachs’ dealmaking revenue, which is based in London and has a European head office, increased by 7 percent to $688 million.

David Solomon, 62 years old, stated that “we are in the beginning stages of a capital market and M&A recover.” While certain transaction volumes remain well below their 10-year averages we are well-positioned to continue benefiting from an increase in activity.

He stated that although inflation was “stickier” than most had expected, the US environment remained “relatively positive”.

He said: “Markets continue forecasting a soft land as the expected growth trajectory improves, and equity markets are near all-time heights.”

Goldman’s fees for investment banking rose 21 percent to $1.7 billion, but fell short of analyst expectations of $1.8 billion. Revenue from M&A rose 7 percent to $688 millions, while fees from debt and equity underwriting increased by 39 and 25 percent, respectively.

The trading of commodities, currencies and fixed incomes saw a 17 percent increase in revenue. The income from the Asset and Wealth Management unit, which manages clients’ money for wealthy and institutional clients on their behalf, increased by 27 percent.

Solomon believes Goldman will benefit from the hype around artificial intelligence. Our board spent a week recently in Silicon Valley where they spoke to the CEOs of some of the most innovative institutions.

The conference left us with a feeling of optimism regarding the use of tools, and the rapid innovation of technology in general. The proliferation in AI will create significant infrastructure and funding needs. This should drive activity throughout our entire franchise.

After a failed attempt to enter the consumer sector, the New York-based institution has now refocused its efforts on investment banking and trade. It is one the most powerful financial institutions in the world, with 6,000 employees in London.

The share price of Goldman Sachs has increased by 26 percent so far in this year. This is ahead of JP Morgan ‘s gain of 23 percent and Morgan Stanley’s rise to 13 cents. Goldman Sachs shares closed at $492.23, up $12.25 or 2.6%.

Goldman’s announcement comes after JP Morgan announced last week the largest quarterly profit in American History, thanks to a 50% increase in investment banking fees as well as a 21% increase in revenue generated by equity trading. Morgan Stanley will report its results Tuesday.

BlackRock announced a record of $10.65 trillion assets under management for the second quarter. This was due to a surge in demand from investors for their exchange-traded fund. The largest money manager in the world reported net inflows totaling $81.6 billion. This is slightly higher than $80.2 billion a year ago. The money manager’s exchange traded funds received $83 billion in new investments from investors, which accounted for the majority of the total. Larry Fink (71), its chairman and CEO, said that “we see incredible growth opportunities for our shareholders and clients for 2024 and beyond.” BlackRock shares fell $5.01 or 0.6% to $822.96.