Expect a big bank earnings bonanza this week, says UBS' Alli McCartney

Summary

Alli McCartney of UBS Private Wealth Management discusses the outlook for bank earnings and broader market trends. She sees potential for a third consecutive year of bank outperformance and expects a strong big-bank earnings season, driven by loan growth, M&A, and a steepening yield curve. She also sees AI improving bank efficiency and margins while double-digit earnings growth supports the market despite Powell/Yellen commentary.

• Bank earnings are in focus, with UBS expecting a potential third straight year of bank outperformance.
• Key bank tailwinds cited: accelerating loan growth, increased M&A activity, and a steepening yield curve.
• McCartney expects a big-bank earnings bonanza that could add tailwinds and stability to the economy.
• She sees AI as a real efficiency and margin driver for banks, with effects beginning to spread to other sectors.
• Pre-released companies showed earnings up 14% on flat revenue, suggesting margin expansion.
• She expects a third straight year of double-digit earnings growth, helping markets look past Powell/Yellen comments.
• The guest remains constructive on banks and the broader equity earnings backdrop.