Calling the trading decline facing the big banks "a full-scale rout," Sanford's Brad Hintz cuts his Goldman Sachs (GS -1.3%) Q3 EPS estimate 15% to $2.62, and Morgan Stanley's (MS -0.4%) 20% to $0.41. Q3 is typically soft, he notes, but this year is something more and fixed-income trading could decline 20-25%.
Analysts are busy cutting estimates after several management warnings and the weak results from already-reported Jefferies.
Earlier: Guggenheim's Marty Mosby downgrades Goldman and BofA for similar reasons (tossing in mortgage banking softness as well).
A few more cuts and the banks can report a big Q3 whiff next month and still be able to trade higher.