Market Performance & Expectations - US banks are up 33% on average over the last three months [1] - The cohort is trading at a 27% premium to its 10-year average when compared with the next 12 months projected earnings [2] - Street is questioning whether valuations are stretched or if new numbers will catalyze further upside [2] - Equity trading is expected to have another banner quarter [4] Macroeconomic & Regulatory Factors - Macro risks include tariff, inflation, lower income, consumer health, and rate uncertainty [2] - Regulatory reforms are expected to loosen capital requirements [3] - Banks are expected to redeploy excess capital in buybacks, M&A, or loan growth [3] M&A and IPO Activity - Global M&A volume is higher by 25% in the first half of the year [3] - IPO volume is up 14% [3] Private Credit Concerns - Concerns exist regarding private credit's potential impact during a financial crisis [6][7] - A report suggests private credit is safer than the banking system due to longer duration exposure [8]
Major banks to report Q2 earnings this week