We delve into JPM, BAC, WFC stocks as they all report earnings on Friday morning before the market open, and they all have run up big going into these 4th quarter earnings reports. Will the Financials be another case of buy the rumor and sell the news? The vaunted Steepening Yield Curve Trade is actually Flat year over year, and the glory days of investment banks underwriting massive mortgage bond volume, large prop trading desks, commodity warehousing, and 42 to 1 leverage are not coming back even under a more bank friendly Trump administration.
Banks are cheap for a reason, they are not going to be high growers because of longer term structural changes in the Finance world some of which are fallout from the excesses of the Financial Crisis, and some have to do with technological and structural changes within financial markets themselves. The glory days of investment banks are gone forever!