All right, let's get more in the banks with Chris McGrady, head of US Bank research at KBW, a steel company. The firm announcing just in the last hour that he is taking over coverage of large cap banks, upgrading several names, including Morgan Stanley and JP Morgan. Chris, great to have you with us. Melissa, good to see you.Um, let's start off with with the uh the upgrades or the move highers in in the ratings with your your initiation of coverage. JP Morgan for instance we're talking about in terms of the ...

Welcome back to Squawk on the Street. Well, America's biggest banks are on a winning streak. Wells, Goldman, Morman Stanley, and more are just inches from hitting their new all-time highs after passing the Fed's latest stress tests late last week and boosting shareholder payouts yesterday after uh the close.Those are the how far they are from all-time highs as we stand, but they're having a decent couple of trading sessions. So what's uh on the deck for banks in the second half of the year. UBS managing dir ...

Market Overview & Investment Strategy - The S&P 500 closed at a record high to finish the first half, with the Arc Innovation ETF up nearly 24% year to date, indicating a potential bull market [1] - The market has been "climbing a wall of worry," suggesting a durable bull market that persists despite controversies like tariffs and Fed-President tensions [2][3] - Interest rates are likely to decrease, and the market is broadening out beyond just a few concentrated stocks, signaling a healthier bull market [3][4] - Productivity is expected to increase, driving inflation down lower than anticipated during the early stages of recovery [8] Economic Factors & Policy Impact - Deregulation is considered a significant factor in unleashing economic activity [5] - The economy has experienced a "rolling recession," with housing and manufacturing sectors yet to fully recover [6] - Recovery is anticipated with decreasing interest rates, deregulation, and potential tax cuts, including immediate expensing of capital goods [7] Tesla & Elon Musk - Elon Musk is refocusing on transforming transportation, space exploration, addressing health issues with Neuralink, and introducing humanoid robots [11][12] - SpaceX has $22 billion in government contracts, solidifying the US lead in space exploration [13] - Autonomous travel regulations are expected to move to the federal level to maintain US leadership in the field [15] Healthcare Innovation - Significant deregulation is occurring within healthcare, with a focus on curing diseases and eliminating chronic conditions [15] - Neuralink's progress is considered miraculous, contributing to advancements in healthcare [15]

All right, one big beautiful bill making its way. We're going to continue to see uh it go to the floor today with a reading. What's your perspective what it means for equities and also for the bond market.Um do you expect the bond vigilantes to react to some of the deficit increasing measures here. I don't Frank. I think we're well past that.I mean everybody's been looking for a reason to uh to get nervous and every time they do they they regret it a week or a day or a month later. So I think we're in a ver ...

Group 1 - Sinclair, Inc. (NASDAQ: SBGI) has reported a new agreement with YouTube, indicating positive expectations for upcoming reforms [1] - The company has made recent acquisitions in the last quarter and may announce new acquisitions soon [1] - The analysis focuses on cash flow statements and unlevered free cash flow figures, with assumptions based on previous financial data and forecasts for the business model [1] Group 2 - The financial models may include various financial metrics such as cost of capital, cost of debt, WACC, share count, and net debt [1] - The analysis typically does not cover growth stocks, instead focusing on companies with a long history of financial reporting [1] - Trading multiples studied include EV/FCF, net income, and EV/EBITDA [1]

Summary of Morgan Stanley (MS) 2025 Conference Call Company Overview - **Company**: Morgan Stanley (MS) - **Event**: 2025 Conference held on June 10, 2025 - **Key Speaker**: Ted Pick, Chairman and CEO Core Industry Insights - **Financial Services Industry**: The discussion revolves around the investment banking and wealth management sectors, highlighting the complexities and opportunities within the current market environment. Key Points and Arguments Market Environment and Strategy - The current market is characterized by complexities such as the mass democratization of AI and energy transition, which will persist for decades [12][13][16] - Morgan Stanley's strategy focuses on raising, managing, and allocating capital globally, emphasizing the need for scale and relevance in wealth management and investment banking [12][15] Investment Banking Performance - The investment banking sector experienced a slow start in the quarter but showed signs of recovery with increased M&A activity and IPO announcements towards the end of the quarter [20][22] - Notable transactions included advising on the sale of Sovis to Motorola and AT&T's acquisition of Lumen's fiber business, each valued around $5 billion [21] Wealth Management Growth - Morgan Stanley holds a $6 trillion position in a $60 trillion wealth management market, representing only a 10% market share, indicating significant growth potential [34] - The firm aims to enhance its client acquisition strategy, focusing on increasing penetration in bank products and alternative investments [35][39][41] Regulatory Environment - The discussion on deregulation emphasizes the need for a repositioning of regulations rather than a reduction, to adapt to rapid technological advancements and maintain relevance in the financial ecosystem [50][53] - The firm has excess capital and aims to leverage this for growth opportunities while ensuring compliance with evolving regulations [56] Financial Performance and Targets - Morgan Stanley is close to achieving key financial targets, including $10 trillion in client assets and a 30% pretax margin in wealth management [60][61] - The focus is on sustainable growth and consistency in earnings, with an emphasis on long-term value creation rather than short-term metrics [64][65] Future Outlook - The firm is optimistic about the growth trajectory in both wealth management and investment banking, with a strong emphasis on innovation and client engagement [48][59] - The strategy includes a focus on durable markets, investment management, and the integration of technology to enhance service delivery [47][49] Additional Important Insights - The importance of maintaining a culture of rigor, humility, and partnership within the firm to navigate complexities and uncertainties in the market [26] - The potential for inorganic growth opportunities as the regulatory environment evolves, allowing for strategic acquisitions [58] This summary encapsulates the key discussions and insights from the Morgan Stanley conference call, highlighting the company's strategic direction, market challenges, and growth opportunities in the financial services industry.

Financial Data and Key Metrics Changes - The company reported a record first quarter in its investment banking segment, with expectations of a 10% year-over-year increase for the first half of the year [10] - The average FICO score of consumers at booking is 790, indicating strong consumer health [6] - Non-interest bearing accounts for retail customers are 26% above pre-COVID levels [7] - The company expects a 20% increase in net interest income (NII) for the year, with half attributed to balance sheet restructuring [47][49] Business Line Data and Key Metrics Changes - The commercial banking segment has seen double-digit growth over the past four years, with 90% of deposits tied to operating accounts [8] - C&I loans increased by approximately $1.5 billion in the first quarter, with similar growth expected in the second quarter [12] - The wealth management business has $61 billion in assets under management (AUM) [7] Market Data and Key Metrics Changes - The company has about $74 billion in C&I loans, with an estimated $1.5 billion potentially impacted by tariffs [18] - The company has a strong presence in mature markets with affluent demographics, which supports its consumer banking strategy [36] Company Strategy and Development Direction - The company has focused on targeted scale and has exited non-core businesses, such as indirect auto loans and vendor finance [32][33] - KeyCorp is concentrating on asset-light businesses, including investment banking and mass affluent wealth management [30] - The company aims to enhance its payments business by providing integrated solutions for middle-market companies [44] Management's Comments on Operating Environment and Future Outlook - Management believes the U.S. economy is not heading into a recession and may even be accelerating [21] - There is optimism regarding loan growth and the overall business environment despite uncertainties related to tariffs and geopolitical events [12][20] - The company is well-capitalized and has significant liquidity, positioning it favorably for future growth [26][46] Other Important Information - The company has a strategic minority investment from Scotiabank, which has enhanced its capital base and growth potential [46] - Management is focused on maintaining a balance between organic growth, dividends, and share repurchases, with a preference for share buybacks given the current stock valuation [91][92] Q&A Session Summary Question: How does KeyCorp view the current economic environment? - Management expressed confidence in the strength of their consumer base and the overall economy, noting that clients are in a strong position despite uncertainties [6][21] Question: What are the key growth areas for KeyCorp? - KeyCorp is focusing on its consumer banking, investment banking, and payments business as primary growth areas [30][34] Question: How does KeyCorp plan to utilize its excess capital? - The company plans to support client growth, invest in technology and people, and consider share repurchases rather than increasing dividends [88][91] Question: What is the outlook for loan growth and credit risk? - Management is optimistic about loan growth and believes that their customer base is solid enough to handle potential economic challenges [12][84]

Core Points - Ontario Budget 2025 is criticized for prioritizing corporate handouts and deregulation over the needs of workers and public services [2][4][8] - The budget fails to address job losses, with 33,000 manufacturing jobs lost recently, and lacks guarantees for job security or decent wages [3][4] - There is a projected $14.6 billion deficit for 2025-26, with overly optimistic forecasts for a surplus in 2026-27, raising concerns about economic stability [9] Summary by Category Economic Impact - The budget does not provide a serious plan to make life more affordable or secure for Ontarians, focusing instead on a narrow surplus projection based on optimistic forecasts [9] - The government is allocating billions into a contingency fund without targeted investments in job creation, risking community welfare amid low economic growth and high unemployment [7] Public Services - Key sectors such as health care, child care, and public education remain underfunded, which undermines community well-being and economic competitiveness [4][6] - There are no new investments in essential public infrastructure like hospitals and schools, which are critical for supporting stable jobs [6] Labor Concerns - The Ontario Federation of Labour emphasizes that the budget ignores the needs of workers for fair wages and secure jobs, leaving them to bear the brunt of economic challenges [2][4] - The expansion of the Ontario Made Manufacturing Investment Tax Credit lacks job guarantees and wage conditions, raising concerns about its effectiveness [3]

Financial Data and Key Metrics Changes - Total company revenue for Q1 was $680 million, a decrease of 5% year over year, aligning with the outlook of down 4% to 7% [16][17] - Adjusted EBITDA for Q1 was $136 million, a 22% decrease year over year, primarily due to lower political advertising revenue and AMS revenue [20] - Cash and cash equivalents totaled $717 million at quarter end, with net leverage finishing at 2.8 times [22] Business Line Data and Key Metrics Changes - Advertising and marketing services (AMS) revenue was $286 million, a 3% decrease year over year, impacted by macroeconomic headwinds and the Super Bowl airing on Fox [17] - Distribution revenue was flat year over year at $380 million, affected by a temporary disruption of service and subscriber declines [19] - Digital advertising revenue showed year-over-year growth, continuing momentum from the previous quarter [18] Market Data and Key Metrics Changes - Advertising demand remains closely tied to overall economic sentiment, with consumer confidence softening, leading to a cautious approach from some advertisers [17] - Approximately 45% of traditional subscribers are up for renewal in 2025, providing opportunities for value capture [19] Company Strategy and Development Direction - The company is focused on five areas: building a strong team culture, leveraging strengths across stations, deploying technology and AI, growing digital revenue, and cutting unnecessary spending [6][7] - Recent sports rights deals have been secured across various leagues, enhancing local broadcasting capabilities [13] - The company is taking a measured approach to share repurchases, preserving financial flexibility amid potential deregulation and M&A opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management noted that the advertising environment is expected to be softer in Q2 compared to Q1, influenced by macroeconomic factors [31] - There is optimism regarding the potential for M&A opportunities due to favorable regulatory conditions [29][40] - The company remains committed to returning 40% to 60% of adjusted free cash flow to shareholders over the 2024-2025 period [21] Other Important Information - The company is on track to achieve annualized core non-programming savings of $90 million to $100 million by the end of 2025 [21] - A reclassification of subscription revenue to distribution revenue was made, with immaterial amounts highlighted for simplification [19] Q&A Session Summary Question: Future deregulation initiatives and M&A opportunities - Management believes that the FCC's support for local broadcasters will unlock M&A opportunities, but specifics depend on the full landscape and pricing [29][30] Question: Anticipated headwinds in the advertising environment - Management indicated that Q2 is expected to be softer than Q1, with lower consumer confidence impacting advertising strategies [31][32] Question: Appetite for M&A and synergy opportunities - Management expressed excitement about M&A opportunities, emphasizing the potential for significant cost savings through consolidation [39][64] Question: Trends in Premion's performance - Premion's revenues remain flattish quarter to quarter, with local advertising continuing to grow while national declines offset this growth [42] Question: Alternative uses of spectrum and revenue generation - Management sees potential in ATSC 3.0 technology for future revenue streams, though significant revenue generation is not expected immediately [48][49] Question: Market concentration and regulatory views - Management highlighted that big tech dominates viewer consumption, suggesting that regulators should consider the competitive landscape when evaluating local news market concentration [59][60]

Core Viewpoint - JPMorgan Chase CEO Jamie Dimon has expressed concerns about the US economy facing "considerable turbulence" due to potential trade wars initiated by President Trump [1][2]. Economic Outlook - The economy is experiencing considerable turbulence influenced by geopolitics, with both positive factors such as tax reform and deregulation, and negative factors including tariffs, ongoing inflation, high fiscal deficits, and elevated asset prices and volatility [2]. - Dimon emphasized the need for the firm to prepare for a wide range of economic scenarios while hoping for the best [2]. Company Performance - JPMorgan Chase reported a 9% increase in profits for Q1 2025, achieving a net income of $14.6 billion, up from $13.4 billion in the same period the previous year, surpassing analyst expectations of $13.6 billion [3].