To The Moon

🌟🌟🌟The US Big Banks are set to report earnings this week amid rumours that the Fed Chairman Jerome Powell is under pressure to resign due to a lavish USD 2.5 billion  Fed HQ renovation.   This could be a seismic shift in the financial world.  With Trump pushing for lower interest rates with a new Fed Chairman, the stage is set for a dramatic pivot.

JP Morgan, Citigroup, Well Fargo and Bank of America enter Q2 25 earnings with trimmed estimates, resilient trading desks and regulatory headwinds.  But if a Trump aligned Chairman takes the reins and cut rates, the banks may do well.

JPMorgan - The No. 1 US Bank

Q2 25 snapshot 

EPS Estimate - USD 4.48 to USD 4.51, Revenue estimate is USD 43.8 billion (down due to comparator company analysis) 

$JPMorgan Chase(JPM)$  faces tough year over year comparable company analysis due to last year's Visa stake sale.  This makes last year's results unusually strong, making it harder to show growth this year.  However its trading and Net Interest Income strength could still deliver a beat.  Net interest income is a key profitability metric for banks and financial institutions. 

JPMorgan is the benchmark.  If it beats and guides higher, it sets the tone for the entire sector.  But with the stock already up almost 20% year todate, it needs a clean beat and bullish guidance to justify further upside. 

Citigroup 

Q2 25 Snapshot 

EPS estimate is USD 1.62.  Revenue estimate is USD 20.95 billion (+ 4% YoY) 

$Citigroup(C)$  is the underdog with a greater upside potential as trading revenue is expected to jump 17% year over year.  Its restructuring gains may surprise on the upside.  Analysts are bullish with price targets climbing towards USD 100.

Wells Fargo 

Q2 25 Snapshot 

EPS Estimate - USD 1.40 to USD 1.42.  Revenue USD 20.76 billion (3% YoY).  Dividend is raised by 12. 5% to USD 0.45 per share. 

The Federal Reserve has lifted Wells Fargo's USD 1.95 trillion asset cap in June 2025 after it made substantial progress in cleaning up its operations following a scandal in creating  fake customer accounts.  

With the asset cap lifted, Wells Fargo can now expand its deposits and loans.  It has strong retail banking and cost discipline.  Return on equity is projected to hit 12.8% over 3 years. 

If Q2 shows momentum in loan growth and NII, this could be the breakout bank of 2025.

Bank of America 

Q2 25 Snapshot 

EPS Estimate - USD 0.86 to USD 0.90 (+3.6% YoY). Revenue estimate is USD 26.61 billion to USD 26.8 billion (+5.6% YoY )  Dividend is raised by 8% to USD 0.28 per share. 

Bank of America's strength is that it has 47 million mobile users and strong digital engagement.  It has a fortress balance sheet with USD 375 billion in assets.  Warren Buffett still holds 632 million shares despite trimming. 

Bank of America is the consumer banking powerhouse.  If Powell resigns and rates drop, its massive deposit base and retail moat could shine.  However it needs to show NII resilience and loan growth to justify its premium. 

Concluding Thoughts 

Citigroup's FX prowess, Wells Fargo's retail surge, JPMorgan's fortress footing and Bank of America's consumer moat offer investors a tantalising outlook.  With Q2 Earnings coming up and the Fed potentially entering a new political chapter, the Big Banks stand at a crossroad - one path is paved with rate cuts and rapid gains, the other shadowed by eroding central bank independence.

So while Wall Street may pop champagne at Powell's potential exit, the big question is :

Is this the beginning of a banking supercycle or the end of monetary integrity as we know it? 

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