Four Major Bank Earnings to Test Bullish Sentiment This Week

Goldman Sachs has advised clients to increase their stock holdings. Tuesday morning, Goldman and three other banks with a combined $1.6 trillion in assets will report quarterly results, putting that recommendation to an immediate test.

All four financial institutions release earnings before the market opens on Tuesday. Since Goldman is among them, the same firm issuing the bullish call must now justify it with its own performance.

Why Is Goldman Suddenly So Confident?

According to Bloomberg, the team led by strategist Christian Mueller-Glissmann upgraded equities to overweight—advising clients to hold more than the benchmark—for a three-month horizon. Fixed income received a similar upgrade over a 12-month period.

The rationale stems from stocks becoming more affordable as oil prices and bond yields increased, while corporate profits remained steady. Bloomberg Intelligence data shows analysts project a 25% surge in S&P 500 earnings for the current quarter, and Goldman anticipates companies will exceed those expectations.

What Do the Banks Have to Prove?

Analysts have set the highest bars for Citigroup and JPMorgan, predicting year-over-year earnings per share growth of 19% and 17%, respectively.

According to Nasdaq consensus data, Wells Fargo and Goldman Sachs have lower expectations, with projected profit growth of 7% and 5%.

All four banks deliver their results ahead of Tuesday's market open, meaning Goldman's earnings will be released the morning following its bullish shift.

• If earnings meet expectations, solid results combined with more stable interest rates might support non-tech stocks to gain momentum.

• If profits disappoint, a single miss might be overlooked, but multiple failures would drag down the broader market.

Goldman's backup strategy relies on bonds regardless of earnings outcomes. The strategists indicated that bonds should transition from being a portfolio drag to providing protection.

GOLDMAN SACHS TURNS BULLISH ON STOCKS AND BONDS

Goldman Sachs has upgraded equities to overweight over three months and bonds to overweight over 12 months.

The bank sees improving valuations, resilient earnings and easing inflation supporting markets into 2027.

Goldman favors…

— *Walter Bloomberg (@DeItaone) October 12, 2026

Why Are Some Investors Not Buying It?

The S&P 500 is hovering near record levels, but a majority of its constituents are not. According to Barclays, over 50% of S&P 500 companies are trading at least 20% below their peak prices.

BREAKING: 84% of S&P 500 stocks are now trading at least -10% below their all-time highs.

Real Estate leads the drawdown, with 97% of stocks down at least -10%, followed by Materials at 96%, Utilities at 94%, and Consumer Discretionary at 92%.

By comparison, Energy has held up… pic.twitter.com/x1l2BpFJ5K

— The Kobeissi Letter (@KobeissiLetter) October 11, 2026

Steve Weiss, an investor, anticipates that banks will welcome new stock listings but remain cautious on mergers and acquisitions due to high borrowing costs.

“I don’t think it’s a slam dunk quarter as everybody’s, you know, intimating,” said Weiss on CNBC.

Portfolio manager Jenny Harrington believes that how the market responds to earnings could be more significant than the actual financial data.

“The behavior will be more telling than the actual data,” Harrington indicated.

Interest rates remain a dominant concern. Bond yields are close to a 24-year peak, and KBW's Tom Michaud has stated that bank stocks will remain under pressure until rates stabilize.

US inflation figures will be released on Wednesday.