My 2c on Financials: US Financials Sector Specialist Commentary Banks · Insurance · Diversified Financials

Research evidence excerpt

My 2c on Financials: US Financials Sector Specialist Commentary Banks · Insurance · Diversified Financials

Rob O'Dwyer - Specialist Sales - US Financials AC North America Specialist Sales J P M O R G A Nrob.odwyer@jpmorgan.com

J.P. Morgan Securities LLC 17 July 2026

My 2c on Financials

Rob O’Dwyer

+1 2126222673

rob.odwyer@jpmorgan.com

Key Highlights

• Rotation should be faded?

• TRV / FITB / RF / TFC Earnings

Morning – yesterday’s price action felt very rotation-driven given the weakness in semis and momentum. That certainly did some

damage to some of the MoMo names in financials (MS, GS, HOOD, IBKR) and I’ll be interested to see whether that continues

today. I'd say the fundamental read-through from this morning’s regional bank results is only OK, so if some of these stocks —

particularly TFC — get bid, I think it tells you the most powerful force in the market right now is the rotation trade, which I

remain skeptical is sustainable. That could create some interesting opportunities.

One stock that may be insulated from the rotation is TRV. While it’s far from a perfect read-across for the group, I do think

investors are looking for signs of an inflection in insurance, and today’s pricing commentary could be meaningful in that context.

Earnings today

TRV (=/+) Strong quarter, helped by reserve releases and lower cat losses, but the underlying underwriting result was also better

than expected. Combined ratio of 83.6% crushed expectations, while ex-cat/PYD performance was also ahead. Pricing was the

key takeaway, with select account renewal rate change improving to 4.1% from 3.8% last quarter and renewal premium change

accelerating to 9.4% from 8.2%. Buybacks of $1.3bn were well ahead of expectations. Insurance investors have been looking for