Cap Mkts Monitor: Cap Mkts in Full Swing; Valuation Is a Tale of Two Cities

Research evidence excerpt

Cap Mkts Monitor: Cap Mkts in Full Swing; Valuation Is a Tale of Two Cities

June 28, 2026 | 21:18 ET~

Financial Services

Cap Mkts Monitor: Cap Mkts in Full Swing; Valuation Brokers, Boutiques, Wealth, and Trusts

Is a Tale of Two Cities Brennan Hawken Analyst

brennan.hawken@bmo.com (646) 648-2408

Marc Palucci VP AssociateBottom Line:

marc.palucci@bmo.com (347) 640-1044

Capital markets stocks entered 2Q on shaky and volatile ground but momentum steadily

David Giunta Associateimproved as the quarter progressed, driving increasing confidence. Correspondingly,

david.giunta@bmo.com (332) 257-0570

EPS updates skewed positively but only modestly, as forecasts already reflect a robust

Josh Brechtel, CFA Associaterecovery. Valuations appear elevated for the Brokers and Trusts, with an improving

josh.brechtel@bmo.com (332) 274-9887

environment, while the Wealth Managers continue to suffer from AI overhang related to

Legal Entity: BMO Capital Markets Corp.

cash optimization worries and LT growth headwinds. We remain selectively optimistic

and will be watching carefully as further deal activity comes to market (eg recent

uncertainty around Open AI’s IPO).

Key Points

Brokers: Recent mega-listings (e.g., SPCX) reinforce confidence in this cycle’s strength,

as large deals tend to revive animal spirits and pull broader issuance and trading

activity. The impact is already evident in upward revisions for GS and MS, driven not

only by ECM strength, but also by improved trading conditions and WM tailwinds

(including workplace, FA-led flows, and E*TRADE). While the bears argue this reflects

peak conditions, timing that turn is inherently difficult, distinguishing early-cycle from

late-cycle dynamics (e.g., 1998 vs. 2000) is only clear in hindsight. In our view, the