To The Moon

💥 Wall Street Roars Back: Big Banks Ignite Earnings Season — Can Tech Keep Up?

After a rough 2024, earnings season 2025 opens with a bang — and it’s the banks leading the charge.

For once, Wall Street’s old guard is stealing the spotlight back from Silicon Valley’s AI darlings.

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🏦 Big Banks, Big Beats

From Goldman Sachs to JPMorgan, the results were loud and clear — banking isn’t dead, it’s adapting.

Goldman Sachs ($Goldman Sachs(GS)$  ): Profit blew past estimates as M&A and IPO pipelines reawaken. Deal desks are humming again.

Citigroup ($Citigroup(C)$  ): Posted strength across all units — corporate lending, consumer, and trading — a rare triple win.

JPMorgan ($JPMorgan Chase(JPM)$  ): Raised its net interest income (NII) forecast after smashing profit estimates, proving its rate resilience.

Wells Fargo ($Wells Fargo(WFC)$  ): Topped expectations, lifted its return target, and finally got breathing room after its Fed cap was lifted.

Morgan Stanley ($Morgan Stanley(MS)$  ): Trading and wealth management powered earnings; stock popped +4% post-results.

Bank of America (BAC): Upped its NII forecast, outperforming on dealmaking — also up +4%.

For an industry hammered by rate hikes, credit concerns, and fintech disruption, this week marks a rare moment of collective strength.

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📊 What’s Changing Under the Hood

This isn’t just luck — it’s a structural rebound taking shape.

1️⃣ Dealmaking’s back. M&A activity is picking up, IPO windows are reopening, and corporate risk appetite is returning.

2️⃣ Balance sheets look cleaner. Loan losses are moderating; deposit flight has stabilized.

3️⃣ Rate leverage remains powerful. Despite cuts on the horizon, spreads still favor the banks — especially the big ones with global exposure.

And perhaps most telling — confidence is coming back.

For months, sentiment toward financials was in deep freeze. Now, investors are asking the right question again:

> Are banks about to quietly outperform tech?

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⚖️ Tech vs. Banks: The Rotation Risk

With banks surprising to the upside, the heat turns to Big Tech — where valuations are stretched and sentiment looks fragile.

AI giants are still growing, but profit deceleration is real.

Regulatory overhang and cooling enterprise spending could bite.

Meanwhile, financials are cheap, cash-heavy, and under-owned.

This sets up one of Q4’s most intriguing narratives:

> The “AI rotation” — money shifting from overvalued tech into underloved financials.

If that rotation takes hold, banks might finally reclaim leadership in the S&P for the first time in over three years.

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🌍 The Macro Pulse

The message behind the numbers runs deeper:

The U.S. economy isn’t rolling over.

Credit flows are stabilizing.

The feared “hard landing” still hasn’t materialized.

Instead, we’re seeing a soft landing with selective acceleration — where balance-sheet strength, not hype, drives performance.

And the banks are the pulse check for that story.

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📈 Trader’s Edge

Financials ($XLF) are now testing multi-month resistance around $42 — a breakout zone to watch.

JPM and GS both hold strong relative strength setups.

MS and BAC show short-term volatility compression — perfect for swing traders looking for range expansion.

Options implied vols remain cheap compared to realized, offering asymmetric upside plays.

If yields stay stable, there’s room for a 5–10% sector re-rating through November.

But traders beware — if the Fed cuts faster than expected, rate-sensitive NII margins could tighten. Watch the 2-year yield like a hawk.

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💭 Tiger Community Questions

1️⃣ Which bank’s numbers impressed you most — Goldman’s deal flow or JPM’s balance sheet mastery?

2️⃣ Are we witnessing the start of a structural rebound in investment banking?

3️⃣ Could this earnings rotation mark the beginning of a new leadership cycle — from AI back to Wall Street?

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🧠 Final Take

This isn’t just another earnings beat.

It’s a psychological shift — from risk aversion to selective confidence.

For the first time in over a year, traders are looking at banks and seeing momentum, not malaise.

And if history’s any guide, when Wall Street wakes up… the rest of the market usually follows.

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