Reward 500 Tiger-coinsThe January 2026 earnings season has started on a rough note for U.S. banks.
All major US banks have now reported their results. Although each bank has a different business focus, increasing short-term spending on future technologies, particularly AI, has become an industry-wide consensus.
However, the market’s reaction has been notably pragmatic: tolerance for rising expenses is fading, and the test of ROI (return on investment) has officially begun.
Management teams repeatedly emphasized AI, data centers, and automation as long-term necessities. But the market is no longer rewarding spending on trust alone.
Big bank earnings brief
$Bank of America(BAC)$ delivered both EPS and revenue beats, supported by strong equity trading and a ~10% YoY increase in net interest income.
Still, the stock recorded its worst earnings-day reaction since 2020.$JPMorgan Chase(JPM)$ missed expectations, with softer debt underwriting activity weighing on results.
$Wells Fargo(WFC)$ missed across EPS, revenue, and NII, burdened by $612 million in severance costs.
$Citigroup(C)$ reported lower earnings due to Russia exit losses, though investment banking fees surged 35%.
Despite very different business mixes, all four stocks sold off.
The split screen: MS and GS offer a different playbook
$Morgan Stanley(MS)$ delivered a clean “wealth management + investment banking recovery” story:
Q4 net revenue $17.89B (above expectations), full-year revenue a record $70.6B; EPS $2.68 (well above $2.44 expected)
Wealth management revenue $8.43B (+13%) with strong net new assets; Investment banking revenue +47%
$Goldman Sachs(GS)$ showed core strength but with a noisy headline:
Q4 net profit $4.62B (+12%), EPS $14.01 (+17%)
Equities trading $4.31B, a Wall Street record; Investment banking revenue +25%
But revenue optics were hit by one-off accounting impacts tied to the Apple card transition to JPM, dragging the platform solutions segment
Trump policy risk: JPMorgan says "Everything' on Table to fight 10% card cap
Trump’s proposal to cap credit card interest rates at 10% starting in 2026 immediately raised alarm.
Combined with lingering uncertainty around Federal Reserve leadership, policy risk has become a second headwind on top of earnings scrutiny.
Bank stocks have become a macro + policy + execution trade, not a simple earnings trade.
How are you trading this earnings season?
Which of the six major U.S. banks do you favor?
With Citigroup and Wells Fargo both announcing layoffs alongside increased AI investment, do you believe these moves can translate into long-term profitability?
Broadly, large banks now fall into two narratives:
Buying higher-certainty names such as Morgan Stanley, Goldman Sachs, and Bank of America, or
Positioning for transformation stories, including JPMorgan’s Apple Card exposure, and the restructuring paths at Citigroup and Wells Fargo.
Which camp are you in — certainty or transformation?
Leave your comments to win tiger coins~
Comments
从交易的角度来看，我更喜欢确定性较高的名字。摩根士丹利和高盛以更清晰的盈利驱动因素脱颖而出，而美国银行尽管市场反应激烈，但结构仍然稳健。
对于摩根大通、花旗集团和富国银行等转型故事，我看到了潜在但更高的执行风险。随着时间的推移，裁员和人工智能投资可能会提高效率，但目前我仍留在“确定性”阵营，寻找更清晰的拐点。
@koolgal @rL @冰晶 @nomadic_m @1PC @SPACE ROCKET @Michane @GoodLife99
Rather I have holdings like $Sheng Siong(OV8.SI)$ when it was still $1+
it is currently the winner 🏆 of my SG stocks!
Citigroup is undertaking a significant restructuring plan that involves eliminating 20,000 jobs by 2026 as part of a cost-cutting initiative expected to yield $2-$2.5 billion in annual savings. The bank has already reduced its headcount by over 10,000 employees.
Citigroup is aggressively deploying Al tools to support these efficiency efforts, aiming to streamline processes, improve data quality, and drive automation across its operations. Its internal Al tools are freeing up approximately 100,000 developer hours per week, and nearly 180,000 employees have access to these Al capabilities.The bank also has an annual technology budget of $12 billion, suggesting significant funding for Al integration.
If I trade for Transformation, I am looking at the aggressive growth in specialized tech and the breakout of hard assets.
can I be both [Sly] [Sly] [Sly]
US banks doing the same old tired play, finance a bubble carelessly, refuse to follow rules and believing that they are too large to fail. Then beg for handouts when things go south.
I would not like to be holding the bag when the bubble pops because it will be as ugly as the dot-com bubble and the real estate bubble.
Greed, it's always greed blinding these people. Play by the rules and things might just turn out ok, but no... they will resort to any means to have the regulations removed.
Hopefully investors have indeed learned the lesson and figuratively whacked the banks' knuckles for being careless.
Transformation: Citi & Wells Fargo announcing layoffs while increasing their AI investments, signal a familiar pattern in banking: streamline cost base, modernise infrastructure & hope the transformation is successful.
These moves can translate into long term profitability but the payoff depends on execution & whether legacy systems can be merged well.
High potential, high complexity.
Certainty: Certainty names like Goldman Sachs & Bank of America operate like wellrun machines. Predictable earnings &diversified revenue streams.They are steady, reliable & less dramatic.
Which camp am I in?
Neither. I am in the disciplined camp.
I don't chase narratives. I don't pick favourites. I let $Financial Select Sector SPDR Fund(XLF)$ do the heavy lifting.
Certainty is comfortable. Transformation is exciting. Disciplined allocation is where the long term returns are built.
@Tiger_comments @TigerStars