So, let's get straight to it, because earnings season has officially begun. And as always, the first companies to step into the spotlight are the major banks.
On Tuesday before the market opened, JPMorgan, Goldman Sachs, and Bank of America reported their quarterly results. Then on Wednesday morning, before the opening bell, it was Morgan Stanley's turn.
And here's something interesting. JPMorgan delivered record breaking results... yet its stock fell. Yes, you read that right. How does that happen? And what do the numbers from all four banks really tell us?
We'll start with the biggest one. JPMorgan posted adjusted earnings per share of $6.14, comfortably ahead of the $5.80 analysts were expecting. Revenue surged to $58 billion, far above the $51.3 billion consensus estimate. Net income reached $16.9 billion, while return on equity came in at an impressive 24%.
So why did the stock fall?
The answer is surprisingly simple. The bank raised its 2026 expense guidance to around $107.5 billion, up from its previous forecast of $105 billion. Investors focused more on the higher future costs than on the record profits, sending the stock lower immediately after the announcement.
What drove the outstanding quarter? Investment banking and trading. Investment banking fees jumped 30%, while equity trading revenue soared 86% compared with a year ago.
CEO Jamie Dimon also offered a note of caution, saying the bank is approaching a point where "things are about as good as they can get."
Next comes Goldman Sachs, where the mood was much more celebratory.
The bank reported earnings per share of $20.98, up an incredible 92% from a year earlier. Revenue hit a record $20.3 billion, nearly 40% higher than last year, and the stock moved higher following the results.
What fueled this surge?
Deals.
Investment banking fees jumped 55%, and this is where things get especially interesting. Goldman Sachs was the lead advisor on the SpaceX IPO, the largest IPO in history. You can imagine what that means in terms of advisory fees.
But that wasn't the only driver. Equity trading revenue climbed 72%, while fixed income, currencies, and commodities revenue rose 32%.
The bank also said it is now the world's number one advisor for mergers and acquisitions, with its deal backlog at the highest level in five years.
As if that wasn't enough, Goldman increased its quarterly dividend by 11% to $5 per share and repurchased $4 billion worth of its own stock.
Third on the list is Bank of America.
Revenue came in at $31.6 billion, up 15% year over year. Earnings per share reached $1.21, an increase of 34%, while net income totaled $9.1 billion.
Once again, the same growth engines appeared. Investment banking fees climbed 50%, while sales and trading revenue reached $7.2 billion, up 33%.
But perhaps the most interesting part of Bank of America's report was its outlook.
The bank raised its operating leverage forecast to between 300 and 400 basis points, compared with its previous guidance of more than 200 basis points.
In simple terms, management expects revenue to grow significantly faster than expenses going forward.
The bank also returned $8 billion to shareholders during the quarter through dividends and share buybacks.
Finally, we arrive at Morgan Stanley, which reported on Wednesday before the opening bell. Its stock gained about 1.2% after the announcement.
The bank posted earnings per share of $3.46, comfortably beating expectations of $2.93, while revenue reached a record $21.3 billion.
The story was very similar to the other banks.
Its Institutional Securities division surged 44%, driven by a 58% increase in investment banking revenue and a 69% jump in equity trading revenue.
Market volatility and a strong environment for corporate deals benefited everyone.
But the most impressive numbers came from wealth management.
Morgan Stanley attracted a record $148 billion in net new client assets during the quarter.
As a result, total client assets across its wealth and investment management businesses reached an extraordinary milestone of $10 trillion.
Yes, $10 trillion. Numbers that are almost impossible to wrap your head around.
