Gavin GrahamMorgan StanleyMSCOMMENTOct 23, 2015

Bit of softness in US banks over past few months. Long-term averages still moving higher. Valuation discount in US banks compared to Canadian. In general, likes US financials as long as 200-day MA trends higher and stock price is above. Stick to the major players like JPM, C, and MS.

He owns JPM. Used to own GS (see Past Top Picks).

He added the past week when it fell 10%. To focus instead on the net interest margin pressure of late and not buy is a missed opportunity. Investments in AI now will pay off with increased efficiency in later years.

After reporting, shares fell 1.8% and down 2.8% today. They just reported: revenues beat, investment and trading were up 18%, also beating, equities were strong, though fixed income missed. Wealth management grew 10% and beat, and investment beat though fell 12%. Problem is, investors are worried about inflation.

Don't sell after a big gain, though you can take a few shares off the table. Is a great stock.

Sold about a year ago to go into GS for better upside.

Given the number of IPOs, trading volume, and rotation into and out of sectors, it'll be a very good year for the banks. More upside. He'd be positively inclined to add some here.

Mergers are increasing, and banks like MS makes advisory fees from them. Also, the banks have been rallying since oil slumped, and will benefit further from rising interest rates, which appears will happen later this year. Plus, hyperscalers may need to keep borrowing money to keep competing with each other.

Reported last week and it was, arguably, the best of the bunch. Astounding ROE of 27%. Wonderful execution. Wealth management doing really well, especially with recent acquisitions. Capital markets business will do really well with huge IPOs coming up.

They report Wednesday. They should have a good quarter, and a fine latter-2026 when IPOs hit the market.

After doing really well last year plus turmoil from Iran, US banks have seen a lot of profit-taking. Long term, keep a core holding. If you take profits, consider diversifying into JPM.

Most banks have rallied strongly over last year and a bit, so yields have come down. As we look toward midterm elections, typically Republican governments are good for deregulation (allowing banks to invest more and grow faster).

Likes a lot of the large US banks. He owns JPM and GS.

This name is also a leader. Down ~13% from recent highs, but nothing to be overly concerned about. Stock's still making higher highs and higher lows. 200-day MA moving higher, with stock price well above, as is the 200-week MA. Healthy signs.

He likes US banks. Loan growth is up as is capital markets activity and investment activity. 

Has $5 trillion AUM. Have a strong wealth management business through tuck-ins, being half their business. They trade at 17x PE and a 17% ROE. Are positioned to do well.

It reports Wednesday. Should benefit from the strong activity in financial markets.