The coming batch of report cards from America's largest banks is set to reflect that Wall Street's core businesses are doing exceptionally well, driven by a Main Street that's doing well enough.
Strong equities-trading and investment-banking activity this spring should propel earnings at Wells Fargo, Citigroup, JPMorgan Chase, Bank of America, and Goldman Sachs, which each report within hours of each other on July 14. Morgan Stanley, U.S. Bancorp, and other lenders are scheduled to report in the days after.
Big market swings in the second quarter and still-robust capital markets activity have meant a fruitful period for trading desks and advisory teams alike. "I mean, it's gung-ho, folks," JPMorgan CEO Jamie Dimon said in late May. "Sponsors are busy, companies are busy. There's a lot of exuberance out there."
Meanwhile, measures of consumers' health are stable, if not lackluster relative to Wall Street's glittering outlook. Key consumer metrics such as delinquencies and charge-off rates are holding steady across big lenders. Bank executives, too, are marveling at consumers' "resilience" in the face of persistent inflation.
"The U.S. has shown a good level of resilience," Citi finance chief Gonzalo Luchetti said in June. "You have some supporting elements like the buildout on AI, tax cuts, deregulation, the strength of the balance sheets on the corporate side -- and finally, not least of it, the strength of the U.S. consumer."
Investors will scour banks' reports for measures of consumers' financial health and signs of any weaknesses, especially as the U.S.-Iran war sent fuel prices higher throughout the quarter.
"From the outside, it may feel counterintuitive that consumer spending is still holding up against a noisy macro backdrop, but the data is tough to argue with," UBS analyst Erika Najarian wrote to clients, citing higher Bank of America credit- and debit-card spending data through May.
She expects robust capital markets and trading performance to drive banks' earnings beats, while any misses would stem from higher costs tied to paying up for customers' deposits, among other areas.
The State Street SPDR S&P Bank ETF is trading near a record high, up 12% in 2026. But within the industry, investors are picking their spots. This year, Wells Fargo is down 8% and Citi has jumped 17%. Bank of America and JPMorgan are up 6% and 3% this year, respectively.
Even with equities at record highs, mergers and acquisitions abound, and a slate of initial public offerings, "we still think there is room to run in this capital markets cycle," Evercore ISI analyst Glenn Schorr said. Though, he added, strong second-quarter results now "appear well understood by investors, which could create a sell-the-news reaction."
Schorr prefers names that have lagged behind recently or trade at lower relative multiples, such as Bank of America, which has underperformed the market this year.
JPMorgan shareholders are set to parse Dimon's comments about recent leadership changes and his eventual succession plans.
The bank said in late June that well-respected consumer-banking chief Marianne Lake was leaving, surprising many investors and employees because Lake was seen as a leading CEO contender. Analysts' questions about succession planning should fill JPMorgan's earnings call, which could cloud solid results.
One note of caution comes from Chris Kotowski and John Coffey of Oppenheimer & Co. They outlined a more cautious view on June 30, downgrading their ratings on Bank of America and Citi to Perform and Goldman Sachs and Morgan Stanley to Underperform, citing valuations they view as unattractive.
"While the cycle may well go on for another 12-18 months or more, we'd rather not wait around for the warning signs to appear," they wrote, recommending that investors instead buy shares of private-asset fund managers such as Ares Management. "Take the money and run."
Write to Rebecca Ungarino at rebecca.ungarino@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 10, 2026 13:37 ET (17:37 GMT)
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