Breakfast News: Bank CEOs Signal Strong Year Ahead
January 16, 2026
| Thursday's Markets |
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With markets closed Monday for Martin Luther King, Jr. Day, Breakfast News will be back in your inbox on Tuesday, January 20.
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1. Big Banks Predict Bumper 2026 Haul
Wall Street bosses are touting 2026 as a big year for M&A and capital markets activity, with Morgan Stanley (MS +0.47%) CEO Ted Pick saying "the setup is ideal," with factors including interest rate cuts and volatile geopolitics.
- "I think the likely scenario is it is a very, very good year": Goldman Sachs (GS +0.13%) CEO David Solomon echoed Pick's sentiment on his earnings call, as the five major banks reported a 15% increase in trading revenue for 2025, the biggest jump in five years.
- "The prediction markets are also super interesting": Solomon personally met with two big prediction companies in the last two weeks, with the bank actively exploring opportunities in the space that's getting a surge in traction with traders.
2. WMT International Head to Step Down
Walmart (WMT 0.32%) International CEO Kathryn McLay has announced she'll be stepping down at the end of the month, having spent several years helping to focus the business on key growth markets overseas, but being passed up for the group CEO role late last year.
- Walmart International operates in 18 countries outside the U.S.: Sales for the division grew by 11% in the latest quarter, spurred on by momentum in China, India, and Mexico, after exits in recent years from the UK and Japan.
- Once viewed as the successor for outgoing group CEO Doug McMillon: McMillon, retiring this month, will be replaced by John Furner, CEO of Walmart's U.S. operations.
3. Trump Signs Taiwan Deal, Targets Tech
President Trump confirmed a trade deal with Taiwan, lowering tariffs on imported goods to 15% (from 20%) as Taiwanese chip and tech businesses pledge direct investments of at least $250 billion in the U.S.
- "The objective is to bring 40% of Taiwan's entire supply chain and production, to domestically bring it into America": Commerce Secretary Howard Lutnick said the deal should enable the U.S. to become self-sufficient in the capacity of building semiconductors.
- Wholesale electricity auction push takes aim at big tech: Bloomberg reports the U.S. administration is going to announce a new requirement for some states to auction off new long-term electricity contracts, in a move to protect consumers against rising utility bills caused by power-hungry data centers.
4. Dividend Investor Recs in the Spotlight
Vail Resorts (MTN 2.41%) closed 2% lower yesterday after a report showed season-to-date skier visits were down 20% compared to the same period last year. The stock has a current yield of 6.26% versus 1.13% for the S&P 500.
- "The share price didn't move much...because the poor weather conditions were already known": Fool analyst Anthony Schiavone commented the dividend "usually reevaluates its payout in March. I would rather management rip the band-aid off and cut the dividend to strengthen the balance sheet. We shall see."
- Beating earnings estimates 88% of the time over the past two years: Regions Financial Corporation (RF 1.82%) fell over 5% ahead of the market open after posting results with CEO John Turner noting the current "competitive environment", despite detailing record-breaking income for the wealth management and treasury management divisions.
5. Your Take
At what point does a great business become too expensive to buy, and how do you balance valuation concerns against quality and growth potential?
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