Morgan Stanley (MS)

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.

Nearly every big M&A deal in 2025 included MS (and JPM), and will continue this year.

He's going to pull the lens back, as he likes to look at things from a macro perspective. In 2020, we went from falling interest rates for 40 years to what is likely rising long-term interest rates for the next 25-30 years. That benefits banks in particular.

If you look at the XLF in the US, after going nowhere from 2008-2021, it finally made a new high. Beginning of a new long-term bull market that probably goes on 10-12 years. During that time, earnings go up and so do dividends. The multiple expands.

US banks have had a wonderful year. He's used JPM as a Top Pick many times, and he also owns MS. 95% of global banks are trading above a rising 200-day MA. Don't be afraid of a bull market. These are dividend growth stocks, and when there's inflation a rising stream of income is pretty attractive to offset the rising cost of living.

In terms of quality, hard to argue against JPM -- best of breed. GS is tops on the investment banking side. He's overweight US banks.

He bought it. The debt-to-equity ratio is a little better than GS, so he prefers MS. Owns both.

The capital markets banks are all performing really well. That tells you something about the rest of the market; if investors are focusing on these banks, then they must have a view that lots of deals will be done and that capital markets provide a good opportunity. This name is more investment management than trading, but still very attractive.