To The Moon

Major U.S. banks, such as JPMorgan Chase, Wells Fargo, and Citigroup, will commence reporting their second-quarter results on July 14. Heading into the earnings season for the second quarter, banks are faced with low expectations as earnings have yet to make a significant recovery since the eruption of the regional banking crisis in March. The prevailing market sentiment towards bank stocks is excessively negative, but robust net interest income will likely surprise investors and offset the weakness in capital markets.US banking stocks have been among the best-performing sectors in the past week, indicating that investors may be positioning themselves for a positive earnings and outlook surprise from US banks. The future performance of US banks largely depends on whether the U.S. economy e

The equity markets of Developed Markets (DM) economies are going through a slow roll in the year so far as recessionary indicators continue to be prevalent while not enough are flashing red to call for a recession in the biggest DM of all: the United States. This colours how the markets can be expected to perform in the next six months. JPMorgan estimates that while core inflation is likely to cool, the inflation slide is likely to prove incomplete. An actual recession would go a long way in cooling high valuations and increasing affordability. There, in the absence of a recession, the bank forecasts that global core inflation will remain well above 3% through the end of 2024. Of all possible scenarios, the dominant one indicates a 36% probability of a synchronized recession sometime in 20