Wall Street Banks Set to Pull in Almost $39 Billion From Trading

• Big banks are expected to report blowout quarters for capital markets and trading, with investment banking up 25% year-on-year and trading up 15%.
• Loan growth is in the mid-to-upper single digits, but the challenge lies in funding it profitably amidst competitive deposit pricing.
• The regulatory environment is stabilizing, with quicker M&A approvals and strong capital ratios at two-decade highs, providing banks with more optionality.
• Citigroup is seen as a deep value play with a credible path to higher returns, while Morgan Stanley is a best-in-class growth play.

Chris McGratty from KBW anticipates a strong earnings season for big banks, driven by robust capital markets and trading results. While deposit management and net interest margins remain key for the second half, banks are well-capitalized with improving regulatory clarity. Citigroup and Morgan Stanley are highlighted as attractive investment opportunities.