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Big Bank earnings are rolling out this week, with Morgan Stanley (MS) and Bank of America (BAC) more than doubling in quarter four after a spike in dealmaking.
Mac Sykes, Gabelli Funds portfolio manager, joins Morning Brief to discuss earnings season and the banks’ surge in quarter four.
Sykes discusses the favorable environment for banks today. "We now have a normalized curve, so instead of the inversion [there is] a pretty normalized real rate," he explains. "We have regulations that are going to be easier, so that boosts M&A." Sykes also adds that the "consumer activity has been very good."
Additionally, Sykes points to how Bank of America's trading underperformed compared to rivals but says repricing of legacy investments is "going forward over the next several years" to boost net interest income.
Watch the video above to hear Sykes' full insights on how these factors are shaping the future of Big Bank earnings.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
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This post was written by Josh Lynch