BAC did a nice job displaying its "responsible growth" mantra highlighted in lower consumer loan risk and balance sheet integrity. NII growth has always been its strong point and should bridge it through the oncoming recession, even if credit losses rise off of historical lows. We continue to be a Buy on the stock. Sell on bonds with further credit spread widening. And our view of Low regulatory risk and counterparty risk.
GS more on its back legs as markets & credit costs gravity brings formerly explosive results down to sea-level. Still it has a plan to diversify business lines to ultimately bring durability to the boom & bust revenues. Remain a Buy on stock, Sell on bonds with more credit spread widening ahead. Regulatory risk Medium. Move to Medium on counterparty risk.
JPM is not used to be knocked down on its haunches. And CEO Jamie does not like to put up with all the pushback from regulators and the analyst community that is stifling the stock momentum. Still, the banks is the strongest of the bunch and will rebound the best as the environment normalizes. Buy on stock, Sell on benchmark bonds. Systemic risk Low as is Counterparty risk.
WFC is finally growing up and becoming a big bank with more normal results. Best earnings call we heard in over six years since it hit the wall with all its scandals. Move to Buy on Stock after years of a Sell as core loan metrics doing well in a softening environment. Still a Sell on benchmark bonds with more Fed tightenings weighing on all bank spreads. Regulatory and counterparty risks remain Medium.
Citi wowed the investor community as it scored a healthy EPS beat. Service sector results, more succinctly known as treasury and securities processing/services activities faced off well against scaled down investment banking. Move to Buy on Stock, Sell on benchmark bonds. Systemic risk High though we could move to Medium. Counterparty risk Medium.
Morgan Stanley showed the warts of the current market environment as key businesses were kicked down. Still, its capital picture is stronger than its half-brother, JPMorgan. We continue to be Buys on the stocks of both MS and JPM. Bond spreads wider but still can burst out more. Regulatory risk is Very Low and counterparty risk was Low.
Wells Fargo saw better results in card/auto/personal banking. But still overwhelmed by lower mortgage originations and industry-hammered investment banking and much of capital markets activities. Still a Sell on stock and benchmark bonds. Regulatory and counterparty risks are Medium level.
Citi did another tap dance earnings routine as it tries to keep the investor pack from splitting. As the Eagles 50th anniversay rock tour setlist sometimes highllights its "The Long Run" that matters. And Citi wants its investors to keep the faith and the relationship alive in its long turnaround journey. We shall see. Neutral on stock. Sell on bonds. Regulatory risk High. Counterparty risk Medium-to-High.
MS had stable wealth management results, but choppy capital markets that seized the peer group. More M&A deals closed than the competitors, but that is sort of backward looking metric.. Still a Buy on Stock, Sell on benchmark bonds. Regulatory risk Very Low. Counterparty risk Low.
Goldman pulls lever in trading to soften the slide in I-banking, but still it shows its dependence on less durable revenue streams. Wealth management powered through lower equity performance and consumer banking making gains. Still Buy on stock, Sell on benchmark bonds. Systemic risk rises to Medium. Counterparty risk Low-to-Medium.