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Jan 16, 2025 Matt Frankel, an investment analyst specializing in banking, joins Kirsten Guerra, an expert in data storage technology, for a deep dive into the banking sector's stellar earnings. They explore why banks may be overvalued compared to 2023 figures, the dynamics between JP Morgan’s consumer and investment banking, and the growing allure of private credit markets. Kirsten then brings attention to Pure Storage, highlighting its innovative tech and partnerships that set it apart in the crowded cloud landscape.
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Bank Earnings Insights
- Bank earnings reports look impressive, but 2023 had special FDIC assessments.
- Current growth is driven by investment banking and trading, not consumer banking.
Impact of Incoming Administration
- Banks benefit from less regulation and increased M&A activity, boosting investment banking.
- Tax cuts also benefit banks significantly due to their high tax burden.
Inflation and Interest Rates
- Lower inflation encourages the Fed to cut rates faster, benefiting the entire market.
- Rate cuts particularly help banks by improving interest margins.