These 2 bank stocks are the biggest winners of the Fed’s latest stress tests
The bank stocks rose on Monday after the Federal Reserve announced the annual stress test results on Friday. The Wall Street analysts say these two club holding is on the top. Morgan Stanley analysts described Goldman Sachs and Wells Fargo as the “largest winners” of the 2025 stress tests that put us in banks with at least $ 100 billion assets through the hypothetical economic decline scenarios to see how each one will ventilate the volatility. While the whole banks participated in the survey, Morgan Stanley said in a note on Sunday that Goldman and Wells were the most improved from last year. This is due to the fact that both of them are further reduced by the majority of their peers of stress capital buffers. These tampons are what the regulators use to determine how large an emergency fund should be held in case of another financial crisis. For example, Goldman experienced the biggest decrease in the stress capital bumpers between the group. The size of the decline is much sharper than us or the market expects, Mor Morgan Stanley said in this year’s Fed tests that Goldman’s hypothetical stressful trade and counter -party losses have decreased significantly compared to 2024. The same can be said for Wells Fargo, where the capital requirement in the tests has fallen to the second place. This is important, because it can pave the way to increase the dividends of Wells Fargo and Goldman, which makes it easier for capital requirements. Both of these are usually described in sessions that follow the annual results. In addition, more loose rules can lead to more credit growth and new investments in growing business areas, as companies do not have to be conservative with their capital. In a market note, Wells Fargo analysts estimated that the results of this year will earn about $ 50 billion extra capital for large banks. (The research side of these Big Wall Street firms is separate from the work of the banks and analysts never cover their own stocks.) However, WELLS analysts said that the results of the 2025 were “more evidence that this period is the most positive regulatory change for banks in thirty years.” “The FED stress test is a clear limit in which the regulation becomes less laborious, less variable and more transparent in both the results and the comments of the FED.” The big painting financial sector was leading the markets of Monday, Goldman shares progressed more than 2%, and at an earlier date, each hit a slightly above $ 714 dollars. Wells Fargo rose by over 1% and the highest level of the day increased to the highest level of $ 81.50 on February 6. Positive results and better performance of the group follow other positive developments for these names. As expected, it seems to alleviate bank arrangements under the Trump administration. Last week, the FED was arranged in the country’s most important banks according to capital requirements including Goldman and Wells. Changes will make it easier for these companies to purchase more US government bonds and lend more freely. The regulatory proposal was made even more clear in the statements of the Fed’s new audit Vice President Michelle Bowman. In a speech last week, “This offer takes the first step towards what I see [a] Long -term follow -up to distort and reform capital requirements. Bowman was assigned by President Donald Trump as the best banking regulator of the FED and approved by the Senate in early June. Wall Street has a big turntable in recent months. He was chosen as an insurer for the first high -profile offers (public offering) such as Goldman Sachs, Chime and Ethoro. This means more fees for the banking giant. Seven years later, Wells Fargo saw the abolition of the asset limit imposed by the FED of $ 1.95 trillion at the beginning of this month. The other club Financial Holding Capital One closed the purchase of a credit card and payment system company of $ 35 billion last month – an agreement under Trump as a more comfortable regulatory environment. To be sure, Capital One Fed’s 2025 stress tests also passed. The company’s capital requirements have also decreased – even less than Wells and Goldman. Nevertheless, Morgan Stanley analysts described it as a “positive story”. Capital One, which is technically a bank, is a largely credit card editor. As a result, the great bank is a great time for stocks. The stress test results of the Fed are another indication of facilitating arrangements for Goldman, Wells and Capital One, who can release more capital to return to their shareholders like us. In the case of Goldman Sachs, the additional capital may allow the firm to expand the Rating Management Department, which sees a double -digit revenue increase for the entire last year. Since our main thesis on Goldman is related to the giant investment banking business that sees the company grew more than 24% last year, it continues to recoil in the construction of a Wall Street agreement, such as merger and inheritances and public offering. In addition, for Wells Fargo, capital flexibility can open more expansion in the budding investment banking section. For a long time, we have said that investments in this business are a great opportunity to diversify Wells’ income flows, so it is not due to interest -based income affected by the Fed. “I think it’s important [CEO] Charlie Scharf wants to take over many businesses made by other banks, Jim Jim Cramer said on Monday, in March 2024, Wells’ agreement section of the agreement section. “(Jim Cramer’s philanthropic trust long GS, WFC, COF. Look here for the full list of stocks.) By subscribing to Jim Cramer and CNBC Investment Club, you will receive a commercial warning 45 minutes after Jim. 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