Major Banks May Earn, But Market Rally May Peter Out: Barron’s Daily

As the four largest U.S. banks—JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup—report earnings this week, some analysts are warning clients that valuations are stretched and that the current market rally could soon lose momentum.

Deregulation in the financial sector could pave the way for increased stock buybacks by the major banks.

Profit and revenue are generally expected to rise compared to a year ago, Rebecca Ungarino and Janet H. Cho reported for Barron’s Daily.

The earnings will provide investors a window into how investment banking, trading desks, consumer banking, and wealth management arms fared during the volatile second quarter.

Analysts are also watching closely for signs of weakening loan repayments and shifts in credit quality.

The KBW Nasdaq Bank Index rose 9.6% in the first half of 2025—its best first-half performance in four years. But future gains may depend on forward guidance, said Bank of America Global Research analyst Ebrahim Poonawala.

HSBC analyst Saul Martinez recently downgraded JPMorgan, Goldman Sachs, and Bank of America. He argued that JPMorgan, despite its strength, shouldn't be trading like a tech giant.

Still, he remains optimistic about the bank’s fundamentals.

Meanwhile, Christopher McGratty, head of U.S. bank research at KBW, noted that despite uncertainty over the administration’s trade policies, deregulation in the financial sector could pave the way for increased stock buybacks by the major banks.