Dougie Kass
Hedge Fund Manager, President of Seabreeze Partners
JPMorgan's results deserved more than a headline read, and the instantly optimistic TV take missed that the company expects higher operating expenses. Bank profits are more nuanced than confident commentators suggest, so the stock's gap higher on the report was a shorting opportunity rather than a reason to buy. x.comÂ
Banks' weak response to earnings despite low expectations warrants caution into the rest of Q3 reporting. JPMorgan, Wells Fargo, Citigroup and Goldman Sachs all fell after mixed results, while the bank ETF also declined. x.comÂ
Bank of America's earnings miss extends beyond its one-time fine, so the selloff may not yet be fully priced. Investment-banking fees fell 11%; wait for fee income to stabilize before treating the drop as merely a fine scare. x.comÂ
JPMorgan looks remarkably cheap against nearly every other bank despite being the best of them. Its forward P/E looks to be around 13. x.comÂ
JPMorgan should ultimately go lower, but the near term looks less favorable for a bearish bet. Q1 metals-trading earnings are likely to be very profitable, and proposed rules easing large-bank capital requirements show regulators trying to protect big banks like JPMorgan. European financials are a safer place for the bearish view for now. x.comÂ
Hyperscaler credit stress and weak financials-versus-staples leadership warn of downside risk in the S&P 500 consolidation. Spreads have broken July wides, though an upside breakout is probable if financials stabilize. So far, tech weakness has lowered yields as Fed hikes are priced out, letting defensives rally and the S&P chop. If the Fed signals Nasdaq weakness won't stop tightening without better data, the tech-yield link could break in an uncomfortable, 2018-like direction. x.com x.com … Show more
Bank stocks look buyable if systematic selling is reacting to a flatter yield curve: the front end that drives earnings has barely moved. JPMorgan and Citi card spending rose 10% and 13%, and Citi and Wells Fargo reported lower credit losses. Wells expects steady margins and improving interest income as loans grow and old fixed-rate assets roll into higher yields. Funds crowded into banks before results, limiting near-term buyers. x.comÂ
AI savings agents threaten the deposit spread behind the four largest US banks' profits. Per a Jefferies report, UK firm Riff's agent automatically moves money out of zero-interest accounts; if it scales, such balances could fall 80% and deposit margins from 190 to about 20 basis points, a hit near 80% of major UK bank profits. JPMorgan, Bank of America, Wells Fargo and Citigroup earned $69B of net interest income last quarter, over double their profits. Jefferies calls it 'when, not if'. x.com … Show more
Big banks' negative earnings reactions leave regional banks looking likely to continue lower. Regionals were a leading bear sector in many previous negative markets, including the 2025 bear market and the early-2023 regional banking crisis. x.comÂ
JPMorgan is buyable on pullbacks to its daily 9-period moving average ahead of an earnings run-up in early July, with financials such as Goldman Sachs, Citigroup, Interactive Brokers and Bank of America doing great. x.comÂ
Independent Bank Corp. looks cheap against its earnings. The holding company for Rockland Trust trades at 14x trailing earnings and about 10x next year's, while banks usually get 12x. Fair value is $87.09 to $110.84, based on 12x next year's forecast $8.25 a share, give or take 12%, so the stock sits 9% below the low end of fair. It would be expensive above $89.28. The call leans on the forecast, which is 48% above trailing earnings, and is based on levels only, not fundamental work. x.comÂ