Thomas Michaud

KBW CEO Michaud notes that fundamentals (loan growth, credit quality) are green lights and the "moratorium on bank mergers" for banks over $200B is effectively over. Wells Fargo's Willis advises rotating into Financials as a way to play AI trends through incumbents. The combination of strong fundamentals, a regulatory environment conducive to M&A (creating takeover premiums), and a rotation out of expensive tech makes financials attractive. LONG Regional Banks and Financials for M&A upside and valuation rotation. Commercial real estate credit deterioration; interest rate volatility.

KBW CEO Michaud notes that fundamentals (loan growth, credit quality) are green lights and the "moratorium on bank mergers" for banks over $200B is effectively over. Wells Fargo's Willis advises rotating into Financials as a way to play AI trends through incumbents. The combination of strong fundamentals, a regulatory environment conducive to M&A (creating takeover premiums), and a rotation out of expensive tech makes financials attractive. LONG Regional Banks and Financials for M&A upside and valuation rotation. Commercial real estate credit deterioration; interest rate volatility.