US Banks See Dealmaking Boom Driven by Trump-Era Deregulation

Strong Earnings Season for US Banks

• 🏦 US banks kicked off earnings season with a strong performance, largely driven by a windfall from dealmaking.
• 📈 Four out of five major US banks reported an increase in quarterly fees from advisory work, signaling a robust period for M&A.

Trump Administration's Impact on M&A

• 🏛️ CEOs and boards view the Trump administration as providing a window of opportunity for significant, transformative strategic deals.
• ⏳ The perception is that the Trump administration is more relaxed about large deals and market concentration compared to the Biden administration, encouraging companies to act within the next few years.
• 💰 This regulatory environment is enabling banks to actively encourage clients to pursue big deals.

Equity Trading and Market Activity

• 📊 A significant uptick in equities trading revenue was observed, driven by high stock prices and increased trading volumes.
• 🥇 Goldman Sachs reported a record quarter in equity trading revenue, reaching $3.1 billion, with total equity trading revenues for big banks hitting $60 billion in 2025.
• 🌍 There has been notable investor movement, with some selling US equities to invest in European and UK markets.

Diversification and Potential Headwinds

• 💼 Some big banks are growing their asset management business to smooth earnings, with Morgan Stanley reaching $9 trillion under management.
• ⚠️ Potential headwinds include proposals from the Trump administration to cap interest rates at 10%, which banks are actively lobbying against.

European Earnings Outlook

• 📉 Analysts expect the worst earnings performance in Europe for the last seven quarters, attributed to tougher comparative periods after strong previous earnings.
• 🚀 Sectors like metals and mining have shown good results, but growth potential may be limited.
• 💻 The S&P 500's tech-heavy nature contrasts with Europe's sector makeup, contributing to different earnings progressions.

European Luxury Sector Performance

• ✨ The luxury sector has shown mixed results, with Richemont performing well, reporting sales up 11% despite tough comparatives, particularly in its jewelry sector.
• 📈 Double-digit growth was seen in the US, the Middle East, and Japan, with encouraging 6% growth in mainland China.
• 🧐 Upcoming reports from Burberry and LVMH will be closely watched for further insights into the sector's performance.