Profits for America's biggest banks are shrinking, as "easy money" policies that made the COVID era a boom time on Wall Street come to a close, Matt writes.

What's new: The latest earnings reports.

• Yesterday: Goldman and BofA reported smaller profits than last year.
• Last Friday: Wells Fargo and Citigroup, ditto.
• Last Thursday: JPMorgan and Morgan Stanley, double ditto, plus they both missed analyst expectations.

The big picture: The free-money era on Wall Street — a side effect of the emergency monetary policies the Fed used to keep the pandemic from destroying the economy — has more or less ended over the last few months.

Backstory: Starting in March 2020, the Fed slashed interest rates to near zero and began printing what would ultimately be several trillion dollars and pumping them into financial markets.

• That supercharged Wall Street businesses like running public stock offerings (see chart below) and corporate bond sales, advising and financing big mergers and acquisitions, and operating trading desks.
• Bank share prices surged, too. A year after the stock market bottomed on March 23, 2020, Morgan Stanley was up nearly 200%. Goldman Sachs was up about 150%. Bank of America and Citigroup had doubled. (The S&P 500 was up about 75% over that time.)

The intrigue: Interest rates have surged this year, rapidly changing the conditions in financial markets and slowing down bubbly businesses.

• High rates crushed stock prices and pushed the S&P 500 into a bear market, dissuading companies from selling shares into a down market.
• The business of managing corporate bond offerings has also slumped as interest rates rose. (Companies don't want to borrow at what seem, relatively speaking, like high rates.)
• Higher borrowing costs — which the Fed is using to try to slow the economy, and thus, ease inflation — also raise the risk of recession and the losses on loans that typically occur during downturns. So banks are socking away billions in reserves just in case things get ugly, which hurts their earnings.

Yes, but: It's not all bad on Wall Street.

• Volatile market conditions can be good for bank trading desks that make the right calls. Trading was a bright spot for Goldman Sachs and Citigroup this quarter.
• Higher interest rates can also boost the money banks make by charging interest. (Bank of America did just that, for example.)

The bottom line: The market seems to see tougher times ahead for big banks — much of those stock gains have evaporated this year.

IPOs are a great example of the COVID boom-and-bust times Matt mentioned above, Axios' Kate Marino writes.

The big picture: In the first two quarters of this year, deal flow fell off a cliff from the gangbusters 2021, data from Dealogic shows.

• Yes, but: The number of IPOs in the first half actually wasn't that out of line with pre-pandemic norms.

Go deeper: The chart above shows the number of deals — but by the dollar amount of funds raised, the spectacular Q1 2021 was even more of an outlier.

• The $141 billion raised that quarter was seven times higher than the prior quarterly average going back to 2017. And it was 11 times higher than Q1 of this year.

What to watch: If trends from this year's slow second quarter continue — or worsen — the IPO market may be headed for a deeper downturn rather than just a return to "normal" levels.

• And as Axios' Dan Primack recently reported, optimism for a rebound is quickly fading.

⚡️Heat wave starts to hamstring Europe's energy infrastructure. (Bloomberg)

⛽️ Average U.S. gas prices fall below $4.50 per gallon. (AAA)

Everyone's watching Netflix earnings, due out this afternoon, but the big mystery is how many people are actually watching Netflix, Emily writes.

Why it matters: Netflix was once an unstoppable growth machine, the juggernaut of the pandemic boom. It's now a leading indicator of the post-pandemic market slump. Just look at that stock chart! Netflix's share price is below where it was in February 2020.

• The streaming giant is expected to report the loss of another two million subscribers, Axios Pro Media Deals' Tim Baysinger reports.

The big picture: For years, investors rewarded streaming ventures — particularly Netflix, the industry leader — believing they were the future. Now, the industry might be out a little over its skis.

• In 2022, investor confidence has waned amid stalled growth and, in some cases, declining subscribers, Tim writes.
• Where once Netflix was the only game in town, there are now seemingly endless competitors, all hunting subscribers at a time when inflation is eating into everyone's entertainment budgets.
• And at more than $15 a month, the standard Netflix subscription is the priciest for a streaming service — making it potentially more vulnerable to cancellations from sensitive consumers, CNBC points out.
• On the flip side, it's a stalwart and maybe you'd be more inclined to first cancel fringe services like Paramount Plus or Peacock.

What's next: After years of saying it wouldn't put advertising on Netflix, the company plans to launch a cheaper, advertiser-supported option later in 2022.

What to (literally) watch: "The Gray Man," a $200 million flick — the most expensive it's ever produced — starring Ryan Gosling and Chris Evans and dropping next week.

Employment levels for mothers of young children are still lagging their pre-pandemic mark, according to a new analysis of women's economic recovery from jobs site Indeed, Emily writes.

• And overall, women's employment has not yet returned to its February 2020 level — although men's employment has, according to the Bureau of Labor Statistics.

Why it matters: Though women are almost back to where they were before — the reverberations of this era will linger.

• Women who left the labor market missed out on months of job experience and paychecks — likely to weigh on gender wage disparities for years to come.

On the plus side: The shift to remote work and more flexibility for some workers seems here to stay, and has been beneficial to working parents.