Big Bank Earnings Recap: Trump Policy Risk! Is Financial Still a Buy?
The January 2026 earnings season has started on a rough note for U.S. banks.
All major US banks have now reported their results. Although each bank has a different business focus, increasing short-term spending on future technologies, particularly AI, has become an industry-wide consensus.
However, the market’s reaction has been notably pragmatic: tolerance for rising expenses is fading, and the test of ROI (return on investment) has officially begun.
Management teams repeatedly emphasized AI, data centers, and automation as long-term necessities. But the market is no longer rewarding spending on trust alone.
Big bank earnings brief
$Bank of America(BAC)$ delivered both EPS and revenue beats, supported by strong equity trading and a ~10% YoY increase in net interest income.
Still, the stock recorded its worst earnings-day reaction since 2020.$JPMorgan Chase(JPM)$ missed expectations, with softer debt underwriting activity weighing on results.
$Wells Fargo(WFC)$ missed across EPS, revenue, and NII, burdened by $612 million in severance costs.
$Citigroup(C)$ reported lower earnings due to Russia exit losses, though investment banking fees surged 35%.
Despite very different business mixes, all four stocks sold off.
The split screen: MS and GS offer a different playbook
$Morgan Stanley(MS)$ delivered a clean “wealth management + investment banking recovery” story:
Q4 net revenue $17.89B (above expectations), full-year revenue a record $70.6B; EPS $2.68 (well above $2.44 expected)
Wealth management revenue $8.43B (+13%) with strong net new assets; Investment banking revenue +47%
$Goldman Sachs(GS)$ showed core strength but with a noisy headline:
Q4 net profit $4.62B (+12%), EPS $14.01 (+17%)
Equities trading $4.31B, a Wall Street record; Investment banking revenue +25%
But revenue optics were hit by one-off accounting impacts tied to the Apple card transition to JPM, dragging the platform solutions segment
Trump policy risk: JPMorgan says "Everything' on Table to fight 10% card cap
Trump’s proposal to cap credit card interest rates at 10% starting in 2026 immediately raised alarm.
Combined with lingering uncertainty around Federal Reserve leadership, policy risk has become a second headwind on top of earnings scrutiny.
Bank stocks have become a macro + policy + execution trade, not a simple earnings trade.
How are you trading this earnings season?
Which of the six major U.S. banks do you favor?
With Citigroup and Wells Fargo both announcing layoffs alongside increased AI investment, do you believe these moves can translate into long-term profitability?
Broadly, large banks now fall into two narratives:
Buying higher-certainty names such as Morgan Stanley, Goldman Sachs, and Bank of America, or
Positioning for transformation stories, including JPMorgan’s Apple Card exposure, and the restructuring paths at Citigroup and Wells Fargo.
Which camp are you in — certainty or transformation?
Leave your comments to win tiger coins~
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
從交易的角度來看，我更喜歡確定性較高的名字。摩根士丹利和高盛以更清晰的盈利驅動因素脫穎而出，而美國銀行儘管市場反應激烈，但結構仍然穩健。
對於摩根大通、花旗集團和富國銀行等轉型故事，我看到了潛在但更高的執行風險。隨着時間的推移，裁員和人工智能投資可能會提高效率，但目前我仍留在“確定性”陣營，尋找更清晰的拐點。
@koolgal @rL @冰晶 @nomadic_m @1PC @SPACE ROCKET @Michane @GoodLife99
Rather I have holdings like $Sheng Siong(OV8.SI)$ when it was still $1+
it is currently the winner 🏆 of my SG stocks!
花旗集团正在实施一项重大重组计划，其中包括到2026年裁员20,000人，作为成本削减计划的一部分，预计每年可节省2至25亿美元。该银行已经裁减了10,000多名员工。
花旗集团正在积极部署人工智能工具来支持这些效率工作，旨在简化流程、提高数据质量并推动整个运营的自动化。其内部Al工具每周释放约100,000名开发人员小时，近180,000名员工可以使用这些Al功能。该银行还拥有120亿美元的年度技术预算，这表明为Al集成提供了大量资金。
If I trade for Transformation, I am looking at the aggressive growth in specialized tech and the breakout of hard assets.
can I be both [Sly] [Sly] [Sly]
US banks doing the same old tired play, finance a bubble carelessly, refuse to follow rules and believing that they are too large to fail. Then beg for handouts when things go south.
I would not like to be holding the bag when the bubble pops because it will be as ugly as the dot-com bubble and the real estate bubble.
Greed, it's always greed blinding these people. Play by the rules and things might just turn out ok, but no... they will resort to any means to have the regulations removed.
Hopefully investors have indeed learned the lesson and figuratively whacked the banks' knuckles for being careless.
Transformation: Citi & Wells Fargo announcing layoffs while increasing their AI investments, signal a familiar pattern in banking: streamline cost base, modernise infrastructure & hope the transformation is successful.
These moves can translate into long term profitability but the payoff depends on execution & whether legacy systems can be merged well.
High potential, high complexity.
Certainty: Certainty names like Goldman Sachs & Bank of America operate like wellrun machines. Predictable earnings &diversified revenue streams.They are steady, reliable & less dramatic.
Which camp am I in?
Neither. I am in the disciplined camp.
I don't chase narratives. I don't pick favourites. I let $Financial Select Sector SPDR Fund(XLF)$ do the heavy lifting.
Certainty is comfortable. Transformation is exciting. Disciplined allocation is where the long term returns are built.
@Tiger_comments @TigerStars