“The idea of a capital markets super-cycle seems possible — albeit not a base case — especially given the level of pent-up demand, dry powder and likely more certainty in deals getting approved,” Mayo said, noting Goldman Sachs would be the biggest beneficiary of such a move.
Trump will likely replace the heads of the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Federal Housing Finance Agency on his first day in office, according to Jaret Seiberg, an analyst at TD Cowen.
The president can only fire governors of the Fed board for cause. That means Democrats will likely maintain control of the Fed until late 2026 and would likely keep a damper on merger activity among banks themselves, Seiberg said.
‘Nuanced Outcome’
Trump’s victory produces “a nuanced outcome” for European banks, according to analysts at Citigroup.
Barclays Plc, which has a large US presence in both investment banking and credit cards, rose as much as 5.3% in London trading, while the Spanish lender Banco Bilbao Vizcaya Argentaria SA, whose largest market is Mexico, fell as much as 7.1%, the most since April.
Movement in other European bank stocks was also more mixed, as traders weighed the prospect of tariffs with other priorities a future Trump administration might have.
Raiffeisen Bank International AG rose as much as 10.7% — the most in 11 months — helped by Trump’s vow to accelerate an end to Russia’s war in Ukraine. The lender is the biggest foreign bank still operating in Russia, but sanctions prevent it from accessing profits generated by the division.
“A de-escalation scenario has started to price in,” said Gabor Bukta, a Concorde Securities analyst. “Talks between Russia and the US may intensify after President Trump’s reelection and a potential easing in geopolitical tension.”
HSBC Holdings Plc, which counts China as one of its biggest markets, rose 0.4% but lagged behind its peers in the FTSE 350 Banks index.
“We believe this election scenario supports U.S. equities relative to the rest of the world,” analysts at Pictet Wealth Management said in a note to clients. “Beneficiaries from this scenario are likely to be financials and cash-rich companies.”
(Credit: Bloomberg)
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