US Banks: Reading the Tea Leaves: Peak Wall Street?

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US Banks: Reading the Tea Leaves: Peak Wall Street?

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US Banks: Reading the Tea Leaves

Peak Wall Street?

Industry Overview

Event‑rich period kicks off 25 May 2026

Bank stocks continue to languish as investors grapple with macro (AI disruption, higher Equity

rates/flattening curve, stagflation) and micro (deposit cost pressure) headwinds. By United States

contrast, a strong markets backdrop has driven outperformance in Goldman Sachs (GS) Banks

and Morgan Stanley (MS) shares. Next two weeks bring useful read‑throughs on the Ebrahim H. Poonawala

operating outlook: management updates, Kevin Warsh post‑FOMC (Jun 17), potential IPO Research Analyst

activity and Canadian banks 2Q results (May 27/28). Relevant research: US Banks: It’s All BofAS+1 646 743 0490

One Big AI Trade / Canadian Banks: 2Q26 Preview: Halo Effect ebrahim.poonawala@bofa.com

Brandon Berman

Research AnalystWall Street momentum peaking? Not so fast BofAS

Investors with whom we’ve spoken again question whether 2026 capital market activity +1 646 855 3933

could mark a peak in GS/MS outperformance. “Peak‑on‑peak” (P/E and EPS) has been a brandon.berman@bofa.com

consistent pushback for over a year. While a consolidation phase is possible, we expect Gabriel Angelini Research Analyst

performance to track the positive EPS revision cycle. Multiple growth engines—strategic BofAS

M&A, record debt issuance, and elevated macro volatility—remain in place, underpinned +1gabriel.angelini@bofa.com646 855 3081

by improving competitive positioning. See Exhibit 1 for performance post large IPOs. Michael Campos

Relevant research: Goldman Sachs / Morgan Stanley Research Analyst

BofAS

Main Street bank doldrums +1michael.c.campos@bofa.com646 855 3912