# Wall Street trading desks are minting cash — ride the bank earnings momentum

_AI-generated trading idea · LONG · GS, JPM_

> Canonical page: https://commonquant.ai/research/for-you/wall-street-trading-desks-are-minting-cash-ride-the-bank-ear--1c43b7e7-e0f1-4cc5-9c0b-4d21697a31a7

The biggest Wall Street banks just smashed their earnings targets thanks to a massive surge in trading profits. JPMorgan and Goldman Sachs are leading the pack, proving that despite market jitters, the financial elite are making record money.

## Idea

JPMorgan and Goldman Sachs just reported blowout earnings driven by record trading revenue. Wall Street thrives in volatile markets because the chaos forces clients to trade, generating massive fees for the big banks. When these giants post record profits and their stock prices break out, it often sets a trend that lasts for weeks as institutional money rotates into the financial sector.

## Advanced Analysis

### Verdict: Strong quarter, unconfirmed trigger — wait for the earnings-day pop

The strongest argument for this idea is that its economic engine is real and fresh: JPMorgan's June-quarter net income jumped 28.3% sequentially to $21.2B and Goldman's rose 17.7% to $6.6B, with Goldman's free cash flow swinging from -$32.4B to +$5.6B, per SEC filings. The strongest argument against it is the ownership posture — filings for the period ended June 30, 2026 show insiders net selling roughly $29.3M at GS and $6.6M at JPM, meaning the people closest to the story were monetizing the very rally the thesis wants to chase. The 60-month backtest returned 42.0% across 40 trades with a 37.5% win rate and an 8.5% maximum drawdown, which is a workable but fragile profile that lives off rare earnings pops. Meanwhile, the paper track has zero trades since the idea was published on July 15, and the parameter-sensitivity evaluation exceeded its time budget, so no robust nearby setup was established — the published 2.4% stop and 4.8% take-profit are the author's choices, not validated ones. The verdict is to wait: neither name meets its entry condition today (JPM's one-day momentum is -1.43% and GS's -0.20%, both below the +2% threshold). The single fact that would flip this to a buy is a 2%-plus up day on above-trend volume — most plausibly the next earnings report — ideally alongside a new insider filing that reverses the net selling.

#### Conviction score breakdown

Composite score computed by the server from the applicable evidence-tier dimensions.

| Measure | Value |
| --- | ---: |
| Thesis support | 72/100 |
| Trade readiness | 35/100 |
| Risk quality | 55/100 |
| Backtest evidence | 58/100 |
| Fundamentals trend | 70/100 |
| Score | 58/100 |
| Composite Score | 58/100 |
| Evidence Tier | backtested |

#### Decision scenarios

Bull, base, and bear cases synthesized from the cited evidence tier. Likelihoods are rounded evidence-weighted judgments, not statistically calibrated forecasts.

| Measure | Value |
| --- | ---: |
| Evidence Tier | backtested |

### Trade now: the trigger is a 2% up day, and neither bank is close

\*\*Do nothing today.\*\* The strategy goes long JPM and GS only when one-day momentum is above 2% with on-balance volume above its 20-day trend. Right now neither is in range: JPM's one-day momentum is -1.4% and GS's is -0.2%, so each sits roughly 3.4 and 2.2 percentage points below the +2% threshold. The volume check cannot be evaluated live because on-balance-volume data is unavailable in the current market feed, and the alternate crossover entry requires a close above the nearest resistance level — $360 for JPM (last close $353.51) and $1,064.46 for GS (last close $1,036.53). Waiting means doing exactly that: no position until a single session delivers a 2%-plus up day on above-trend volume or breaks that resistance on a close.

The completed backtest supports the discipline of waiting rather than anticipating. Over five years on the daily timeframe the ruleset produced a 42.0% total return across 40 trades with a 37.5% win rate and an 8.5% maximum drawdown — a profile that depends on entering only the strong momentum days, not the near-misses. The paper track, live since mid-July, is flat at $10,000 with zero trades, which is the ruleset correctly standing aside.

If an entry triggers, the risk geometry is fixed: the position stop sits at a 2.4% loss and the take-profit at a 4.8% gain, a 2:1 reward-to-risk, with each position capped at 25% of the book. Additional exits guard against a close below the nearest support ($350.18 for JPM, $1,001.67 for GS) and a 61.8% retracement level. Note that no robust alternative parameter setup was established — the sensitivity evaluation exceeded its time budget — so the published settings are what you trade.

One caveat on execution quality: backtest exits were filled on daily trigger bars rather than intraday data, so treat the reported 37.5% win rate as coarse. The action plan itself is unchanged — the setup is waiting for its entry conditions, and today neither ticker meets them.

#### GS price and trigger map

Uses the idea timeframe and keeps price levels on the price axis.

| Measure | Value |
| --- | ---: |
| Ticker | GS |
| Timeframe | 1d |

#### JPM price and trigger map

Uses the idea timeframe and keeps price levels on the price axis.

| Measure | Value |
| --- | ---: |
| Ticker | JPM |
| Timeframe | 1d |

### Blowout Earnings Fundamentals Back a Momentum Setup With a Real 60-Month Record

The idea's core thesis — that record trading profits at JPMorgan and Goldman Sachs translate into durable post-earnings momentum — is supported by the freshest numbers. Per the Reuters report on July 14, JPMorgan posted record profit on big dealmaking and stock-trading gains, and Yahoo Finance flagged Goldman's Q2 2026 beat on record equities trading the same day. The fundamentals confirm this is not spin: JPMorgan's net income jumped 28.3% sequentially to $21.2B for the quarter ended June 30, 2026, with quarterly return on equity rising to 5.6% from 4.5%, and revenue for fiscal 2025 grew 2.8% year over year to $182.4B. Goldman's net income rose 17.7% to $6.6B in the same quarter, with ROE climbing to 5.4% from 4.6%. Both banks are also shrinking their share counts, which amplifies per-share economics. Goldman cut shares outstanding 1.1% in a single quarter to 291.4M, extending a multi-year buyback streak, while JPMorgan reduced shares 0.8% to 2.66B. Rising earnings on a shrinking base is exactly the kind of fundamental backdrop that tends to attract the institutional rotation the idea describes. The shareholder-return machinery is intact and growing. Goldman has raised its dividend at a 38.5% annual clip, paying $18 per share over the trailing twelve months, and JPMorgan lifted its payout 13.2% annually to $6 trailing. Combined with JPMorgan's…

#### GS Debt to equity

Debt to equity trend from CommonQuant fundamentals/XBRL data; -12.8% from first to latest point.

| Measure | Value |
| --- | ---: |
| 2009-12-31 | \2.775801114347937 ratio |
| 2010-06-30 | \2.5871388125008465 ratio |
| 2010-09-30 | \2.6047821087275467 ratio |
| 2010-12-31 | \2.433515176586173 ratio |
| 2011-03-31 | \2.525949026480288 ratio |
| 2011-06-30 | \2.532215711205705 ratio |
| 2011-09-30 | \2.639824220979341 ratio |
| 2011-12-31 | \2.582077040026144 ratio |
| 2012-03-31 | \2.503670313721112 ratio |
| 2012-06-30 | \2.420396678333677 ratio |
| Latest Value | \2.420396678333677 ratio |
| Change Pct | \-12.803670773716377 ratio |
| Ticker | GS |
| Timeframe | reported periods |

#### GS sector percentile check

Ranks GS against 877 companies in its sector using CommonQuant fundamentals.

| Measure | Value |
| --- | ---: |
| Free cash flow | \0.6841505131128849th percentile |
| Return on equity | \45.219347581552306th percentile |
| Ticker | GS |
| Sector | Financials |
| Peer Count | 877 |

#### JPM sector percentile check

Ranks JPM against 889 companies in its sector using CommonQuant fundamentals.

| Measure | Value |
| --- | ---: |
| Return on equity | \86.50168728908886th percentile |
| Revenue growth (YoY) | \32.362459546925564th percentile |
| Ticker | JPM |
| Sector | Financials |
| Peer Count | 889 |

### Scores

- **Conviction score breakdown:** 58
- **Thesis support:** 72
- **Trade readiness:** 35
- **Risk quality:** 55
- **Backtest evidence:** 58
- **Fundamentals trend:** 70

### Watch items

- **JPM — ROC (1)**
- **JPM — Close vs nearest resistance**
- **GS — ROC (1)**
- **GS — Close vs nearest resistance**
- **JPM — Close vs nearest support**
- **GS — Close vs nearest support**
- **GS — Insider net open-market activity**
- **JPM — Insider net open-market activity**
- **JPM — Next earnings report**
- **GS — Next earnings report**

## Key details

- Symbols: GS, JPM
- Timeframes: D1
- Tags: \#banks, \#earnings, \#momentum, \#long-bias

## Community

- Upvotes: 33
- Views: 343
- Copies: 0
- Cosigns: 0

## News sources

- [Goldman Sachs Q2 2026 earnings beat on record equities trading](https://finance.yahoo.com/markets/stocks/articles/goldman-sachs-q2-2026-earnings-120234207.html) — Yahoo Finance
- [JPMorgan posts record profit on big gains from dealmaking, stock trading - Reuters](https://news.google.com/rss/articles/CBMinwFBVV95cUxPUXZXdWw0Um15aXgwRy1uU3dobEJIREY5cDItRFd0d2ZvQjRDdXdVdHZJNmtWWmNuVG5hVWlNZmlXaVQ0eWJ2WndSM1JMOGtIQmpWM29XeVR0OVVheFZQNGVfNmhlYldNdjlfLU1MazZLMjJGVmc4TzdvSWRKNnVkRjNJemVxNGtrck5EWVA5c1dWdUdBSW92Y0RBWDRrdms?oc=5) — Google News

## Related

- [GS trade ideas](https://commonquant.ai/stocks/gs)
- [JPM trade ideas](https://commonquant.ai/stocks/jpm)
- [Latest market news](https://commonquant.ai/news)

## About CommonQuant Research

Ideas and Advanced Analysis are generated with fresh, LLM-selected news headlines and grounded in SEC XBRL fundamentals and peer percentiles. Strategies built from these ideas are automatically backtested (12-month and 5-year, walk-forward tuned) and stress-tested before they can go live, then monitored against the news hourly while they run.