- Heading into Q4 earnings season, the team at Macquarie likes the names with diversification and dividends. The challenging environment, they say, means weak results for pure investment bank results.
- On that measure, the team likes JPMorgan (NYSE:JPM) as one of the highest risk/reward opportunities. They expect the lender to generate operating leverage this year on lower expenses combined with stronger than peer group growth.
- In a pair trade, they favor UBS over Morgan Stanley (NYSE:MS) because of the former's higher exposure to FICC (Morgan Stanley slashed FICC exposure late last year).
- They're especially cautious on "pure" investment bank names, especially Credit Suisse (NYSE:CS).