Worries about AI coming for banks overshadowed bullish M&A predictions for 2026

CNBC Finance

4 min read

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch â an actionable afternoon update, just in time for the last hour of trading on Wall Street. Stocks seesawed Tuesday . The market was solid for much of the session, with the S & P 500 posting steady gains. Shortly after 1 p.m. ET, however, the index began to slide and ultimately gave back all of those gains and then some. Financials were the worst-performing sector in the market on Tuesday. The pullback appears tied to concerns that new AI-driven products are coming for the wealth management industry after Altruist announced a new tax-planning offering. The selloff across the group appears knee-jerk in nature, but the potential impact of AI on the industry is something we'll need to monitor. It wasn't all bad news for the banks , with 2026 looking ripe for another great year of Wall Street dealmakingÂ â a windfall for the dominant investment banking franchise at Goldman Sachs and the growing IB shop at Wells Fargo . That's the conclusion of remarks made by C-suite executives at both firms at a UBS conference Tuesday morning. Goldman CEO David Solomon described 2026 as a "constructive year" with "good tailwinds" for mergers and acquisitions (M & A). Solomon pointed to better macroeconomic conditions and continued regulatory leniency under President Donald Trump. Fewer blockades for deals means more business for Goldman, which is the top global M & A advisor by market share. "We feel good about the state of the franchise [and] feel good about the opportunities in front of us," he added. A rebound in M & A â and initial public offerings, for that matter â was at the core of our investment thesis when we started building our Goldman position shortly after the 2024 presidential election. Trump was expected to have a much more hands-off approach to regulating businessÂ combinations. A little over a year into his presidency, that has proved to be the case, affirming our original reason to own the stock. Wells Fargo CFO Mike Santomassimo shared similar sentiments, arguing the bank's budding investment banking division is "starting to see some of that actual growth come through," following years of increased investments into the business. The IB setup is better this year for Wells, in part, because it's the first full year free of the Federal Reserve's $1.95 trillion asset cap for past misdeeds. Lifted by regulators last June, the absence of the cap gives Wells "more flexibility to grow" its balance sheet, Santomassimo said. "We're very pleased with what we're seeing come through so far across those businesses." While Wells has been known as a money center bank, we have been big fans of management's moves to grow its dealmaking business. It means Wells doesn't have to rely as much on interest-based revenues, which are at the mercy of the Fed's monetary policy moves. Boeing announced the delivery of 46 jets in January, one more than a year ago. It was the third-highest January in company history. Of the 46 deliveries, 37 were 737s, five were 787s, one was a 767, and three were 777Fs. Reacting to the news, Jefferies said the January total represents 7% of the 659 deliveries they expect Boeing to execute this year. For the 737, Jefferies is forecasting 499 deliveries, or about 41 per month. We should see 737 deliveries ramp up through the year as the aircraft maker produces more planes. Boeing currently is producing 737s at a rate of 42 per month, but management's target is to reach 47 per month later this year. The Club stock dropped more than 1% in afternoon trading. Up next, after the closing bell, we'll see earnings from Robinhood, Astera Labs, Ford, Lyft, Gilead, Edwards Lifesciences, Cloudflare, and Mattel. Some of the key earnings reports before Wednesday's open are Vertiv, Shopify, Humana, T-Mobile, Kraft Heinz, GlobalFoundries, and Generac. On the economic data side, the January nonfarm payrolls report, delayed last week because of the brief government shutdown, will be released Wednesday morning. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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Worries about AI coming for banks overshadowed bullish M&A predictions for 2026

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