The two key U.S. bank earnings reports for this week are out: Bank of America and Morgan Stanley.
They continued this week's positive trend for bank stocks. Bank of America's results show that traditional lending and deposits remain healthy, while Morgan Stanley's show that capital markets and high-net-worth investors are still highly active.
Bank of America: Core banking was strong, with solid loan growth and no deterioration in credit quality despite that growth. Capital markets, however, were weaker.
Morgan Stanley: Its results were even better than Bank of America's. Equity trading was explosive, up 41% year over year. Fixed income, currencies and commodities trading was weaker, but wealth management assets were impressive.
Taken together, the two reports answer the questions raised earlier this week. In line with the other banks' results reported yesterday, loan growth, net interest income, provisions, investment banking and credit quality remain in an expansionary phase. The capital-supply environment is favorable for the AI industry chain.
However, these results aren't good news for the Fed. As Warsh said previously, financial conditions haven't tightened yet, leaving the Fed room to tighten further.
Another point to note: a shared weakness in Bank of America and Morgan Stanley's results was FICC, which came in below expectations. This suggests bond-market trading may be more challenging than equity-market trading, meaning that the bond market—not the stock market—is where financial-market pressures are currently being felt.
Given the current picture, bank earnings this week have largely come in and confirmed a positive outlook, while ASML's results were strong. TSMC is the only major report left, and expectations are also favorable. Together, this shows that the fundamentals behind the U.S. market's AI narrative remain sound.
But even with solid fundamentals, we still need to be wary of near-term macroeconomic pressures. Based on the current macroeconomic backdrop, if both PPI and retail sales rise later this week, that could largely offset the boost U.S. equities get from positive earnings. Even strong results from TSMC would be unlikely to reverse that. That's the biggest concern.
As I've said before, in the current macro environment, bad news gets amplified and good news gets muted. If the market remains resilient under macro pressure and AI-industry fundamentals hold up, there should be no problem going forward!#9月CPI来袭原油美债走势如何
They continued this week's positive trend for bank stocks. Bank of America's results show that traditional lending and deposits remain healthy, while Morgan Stanley's show that capital markets and high-net-worth investors are still highly active.
Bank of America: Core banking was strong, with solid loan growth and no deterioration in credit quality despite that growth. Capital markets, however, were weaker.
Morgan Stanley: Its results were even better than Bank of America's. Equity trading was explosive, up 41% year over year. Fixed income, currencies and commodities trading was weaker, but wealth management assets were impressive.
Taken together, the two reports answer the questions raised earlier this week. In line with the other banks' results reported yesterday, loan growth, net interest income, provisions, investment banking and credit quality remain in an expansionary phase. The capital-supply environment is favorable for the AI industry chain.
However, these results aren't good news for the Fed. As Warsh said previously, financial conditions haven't tightened yet, leaving the Fed room to tighten further.
Another point to note: a shared weakness in Bank of America and Morgan Stanley's results was FICC, which came in below expectations. This suggests bond-market trading may be more challenging than equity-market trading, meaning that the bond market—not the stock market—is where financial-market pressures are currently being felt.
Given the current picture, bank earnings this week have largely come in and confirmed a positive outlook, while ASML's results were strong. TSMC is the only major report left, and expectations are also favorable. Together, this shows that the fundamentals behind the U.S. market's AI narrative remain sound.
But even with solid fundamentals, we still need to be wary of near-term macroeconomic pressures. Based on the current macroeconomic backdrop, if both PPI and retail sales rise later this week, that could largely offset the boost U.S. equities get from positive earnings. Even strong results from TSMC would be unlikely to reverse that. That's the biggest concern.
As I've said before, in the current macro environment, bad news gets amplified and good news gets muted. If the market remains resilient under macro pressure and AI-industry fundamentals hold up, there should be no problem going forward!#9月CPI来袭原油美债走势如何