Why I'm Cautious On U.S. Banks Despite Strong Earnings

U.S. bank ETFs have outperformed broader financials, driven by booming investment banking and equity trading revenues.

Recent Q2 results showed exceptional results, but I think these could prove unsustainable.

Mounting risks include deteriorating lending standards in private equity, potential CRE loan quality issues, and consumer headwinds from rising rates and inflation.

Valuations are rising, and U.S. banks may be near peak earnings.

I am turning outright bearish on the sector over the next 12–24 months.