Market Expectations & Potential Catalysts - Optimism is high for large-cap banks' Q2 earnings, with focus on loan growth and investment banking activity in the second half of the year [2][3] - IPO market recovery is seen as a potential catalyst for investment banks [3] - High valuations (e g, Bank of America trading at a PE of around 15) suggest caution going into earnings announcements [4] - Regulatory changes are a significant driver for bank stock movements this year [6] Key Metrics & Risk Factors - Net interest income growth, impacted by net interest margin, is a key focus [9] - Credit quality remains generally good, but commercial real estate office market and low FICO score consumers are potential areas of concern [8] - Risk-on sentiment suggests less concern about credit picture, while risk-off would increase focus on credit [7][8] Mergers and Acquisitions - Industry expects consolidation among regional banks due to deregulation [13] - The top 5-7 banks control 85-90% of the assets, with smaller banks controlling the rest, indicating increased polarization in banking [14] - Potential for big regionals to merge or be acquired by G-SIBs exists [15] - Clarity on Basel III endgame proposal is needed before M&A activity accelerates [15] Leadership Transition - Jamie Dimon's leadership has significantly impacted JP Morgan's stock [10] - Jamie Dimon's eventual retirement will likely negatively impact the stock on the day of the announcement [12] - Marianne Lake is considered a potential successor to Jamie Dimon [11]

City Croup, a US equity strategist Scott Croner's with us at Post9 as we get set for earnings season to kick into higher gear. Good to see you, Scott. Welcome.Great to be here, Carl. Um, is the market really just focused on on Q2 earnings. Well, I think it's focused on Q2 earnings, but I actually think it's increasingly focused on the follow through and the aftermath of tariffs and other policy news in terms of what it means for 2026.As we go in the back half of the year, you usually flip forward on the cal ...

All right, June CPI data is due out tomorrow. That's the same day the big bank earnings kickoff with JP Morgan City and Wells Fargo results. For more on those markets, we want to bring in Ed Yardeni.He's the president of Yard Denny Research. Uh Ed, how you feeling about things right now. I'm feeling pretty good about bank earnings.I think uh loans have uh started to improve. Uh there's obviously been a lot of activity uh in the capital markets. The equity market has had a great rally.Uh, Wall Street's prett ...

Trade and Tariffs - Potential new tariffs on the EU and Mexico starting August 1st are being considered, primarily as a negotiating tactic to achieve broader policy goals beyond just trade [1][5] - The market impact of these potential tariffs on European markets has been limited, possibly because investors view them as temporary threats [3] - The shift from free trade to "friend trade" reflects a broader strategy of prioritizing close relationships in global trade [2] Earnings and Market Outlook - Earnings season is approaching, with a positive outlook expected later in the year, potentially boosted by a 10%+ move in the dollar [7] - AI is expected to drive cost reduction and margin improvement for smaller companies, potentially starting next year [8][11] - Tech and communication services are driving most of the earnings growth; without them, overall earnings growth would be negative [9] Investment Opportunities - Smaller value companies outside the Mag 7, trading at 13-14 times earnings, may benefit from AI adoption [11] - In Europe, investment opportunities exist in defense and infrastructure sectors due to increased spending [13][14] - In Asia, tech-oriented markets are preferred over goods-dependent markets due to potential tariff impacts [16][17] Market Valuation - The Mag 7 stocks are trading at approximately 31 times forward earnings, while the rest of the market is just under 21 times [9] - The earnings growth spread between the Mag 7 and the rest of the market is compressing, suggesting potential outperformance of smaller caps [10][11]

Traders are about to see if earnings justify the optimism priced into the US stock market https://t.co/3DmgKG46uo ...

Earnings Season Outlook - The options market implies JP Morgan's stock price will move approximately 3% on the day of its earnings report and about 3.6% by the end of the week, aligning with the eight-quarter average [1] - Netflix is expected to experience a stock price move of around 8% following its earnings release [1] Trading Strategy - A put spread collar strategy is suggested for a broadly held stock, involving buying 1225 puts, selling 1125 puts, and selling 1325 calls for August 22nd weekly options [3] - This strategy offers approximately 8% upside potential and 8% downside protection, corresponding to the implied move, with the expectation of "ball crush" after [3] Company Analysis - One company is described as an "unregulated utility" with a great business model, but its stock price is extended relative to its 150-day moving average [2] - Hedging is recommended for this company going into earnings due to its widespread ownership [2]

Core Insights - Bank of New York Mellon (BNY) is expected to report earnings of approximately $1.75 per share, reflecting a 16% increase year-over-year, with revenues anticipated to grow by nearly 5% [2] - The growth is driven by an increase in assets under custody and administration, which surpassed $53 trillion, alongside cost reductions and a focus on higher-margin businesses [2] - Revenue from fees is projected to rise due to recent market developments and the acquisition of new clients, with a noted correlation between equity market shifts and fee income [2] Financial Performance - BNY currently has a market capitalization of $67 billion, with revenue of $19 billion and net income of $4.7 billion over the last twelve months [3] - The bank's fee income is sensitive to market performance, with a 5% shift in equity markets corresponding to approximately $70 million in fees [2] Earnings Reaction History - Over the past five years, BNY has recorded 20 earnings data points, with 12 positive and 8 negative one-day post-earnings returns, resulting in a 60% positive return rate [5] - This positive return rate increases to 83% when considering the last three years [5] - The median positive return is 3.9%, while the median negative return is -2.1% [5] Correlation Analysis - A strategy to evaluate the correlation between short-term and medium-term returns post-earnings can be employed, particularly focusing on pairs with strong correlations [6] - The correlation between one-day and five-day returns is highlighted as a potential trading strategy [6]

My next guest is expecting all of this bullish momentum to continue. He says investors should look past any soft patches and focus on what's warning. Jim Karen working.Jim Karen is CIO of Cross Asset Solutions at Morgan Stanley Investment Manager. I'm not saying you're recommending Bitcoin. Maybe you are.I don't know. I'm not and it's not part of it. Uh Palunteer.No. Um what is driving this momentum. Is it you know I the little fear and greed index is back to I think greed or extreme greed levels.Um but wha ...

Tech Sector Analysis - Tech earnings continue to print well into the double digits, reaching all-time highs, driven by fundamentals rather than just multiple expansion [1] - The value of tech in portfolios is significant, especially with tariff uncertainty, making US growth exposure valuable [2] - Overweighting tech in portfolios can be justified if earnings continue to print and multiples expand, particularly if a tariff-induced slowdown occurs [3] - Quality active management is crucial within the tech sector, specifically within the "Magnificent 7" portion [4] Tariff Impact and Economic Outlook - The market is still awaiting the bite of tariffs, with a wide range of potential outcomes [5][6] - Commentary on consumer behavior and business investment decisions is important in assessing the impact of tariffs [6] - Focus should be on how tariff rates on major partners (Canada, Mexico, China) affect the economy, while monitoring GDP resilience [8] - There are concerns about the lower cohort, with negative year-on-year card spend and light comps in certain sectors [7] Investment Strategy - A balanced approach in a multi-asset portfolio is currently most appropriate [10] - Mid-single-digit yields on core fixed income are competitive with mid-single-digit earnings yields on equities, given elevated multiples [11] - The strategy is to remain patient, vigilant, and opportunistic, waiting for the next bout of volatility [12] - US growth is expected to be the dominant driver of 10-year Treasury yields in the long term, with yields in the mid-4% range commensurate with US growth [14]

Schneider, senior U.S. Portfolio strategist at Goldman Sachs. Ben, great to have you here. Good morning.We got to start off with the news. You're changing your S&P price targets for three months, six months. And also the next year let's do the 12 month horizon 6900 double digit.About a 1,011% rise from here. What is the catalyst. Right now we're already at all time highs.That's right. >> And when we sent out this note to clients, the real message was even though the S&P 500 has rallied by 25% over the last ...