US Banks Brace for Slowdown as European Lenders Celebrate Record Wins Amid Trade Turmoil

• Key Insights

As US banks gear up for a rocky earnings season amid rising tariffs and slowing profit growth, European counterparts are posting their strongest first-half performance since 1997. Global markets face headwinds from trade disputes, political chaos at the G20, and a packed US economic calendar. This week’s bank earnings—featuring JPMorgan, Goldman Sachs, and others—will reveal how deeply Trump’s trade policies are biting. Meanwhile, the US skips a critical G20 finance meeting, further straining international relations. --- ### Why Are US Banks Under Pressure? The numbers tell the story: Goldman Sachs forecasts S&P 500 earnings growth will plummet to just 4% this quarter, down from 12% in Q1. Companies are squeezed between rising import costs and sluggish sales, with tariffs eating into margins. "The outlook for profits is messy," notes the BTCC research team, pointing to weak corporate responses to higher costs. JPMorgan, Bank of America, and Citigroup report results this week, and investors are watching for clues on how banks plan to navigate inflation, consumer pullbacks, and slower global demand. Wall Street isn’t just looking for good numbers—it wants proof companies can handle what’s next. --- ### Europe’s Banking Boom: What’s Driving the Surprise Wins? While US firms sweat, European banks are thriving. They’ve just notched their best H1 performance in 26 years, fueled by investment banking gains and a flurry of mergers and acquisitions. The contrast is stark: US lenders are bracing for pain, while Europe rides a wave of dealmaking. Could US banks replicate this success? Maybe—but it’s not guaranteed. Analysts will dissect trading revenue and pipeline health as earnings drop this week. --- ### G20 Tensions: Why the US No-Show Matters As finance ministers gather in Durban, the US is conspicuously absent. Treasury Secretary Steven Mnuchin is skipping the meeting, opting for Japan instead. The snub follows months of friction, including Trump’s false claims of "white genocide" in South Africa and fresh 30% tariffs on the country—the only sub-Saharan nation hit by recent trade sanctions. Markets hate uncertainty, and this G20 drama adds fuel to the fire. With a leaders’ summit looming in November, tensions are unlikely to cool soon. --- ### The US Economic Calendar: A Minefield of Data This week’s lineup could shake markets: - Monday : Reaction to new tariffs on Mexico and the EU. - Tuesday : June CPI inflation data. - Wednesday : Producer Price Index. - Thursday : Retail sales figures. - Friday : University of Michigan’s consumer sentiment report. Oh, and 12 Fed speakers are slated to weigh in. Buckle up. --- ### FAQ: Quick Takes on the Week’s Big Questions

Key Insights

How are US banks adapting to tariff pressures?

Most are absorbing costs rather than passing them to consumers, squeezing margins. Earnings calls this week will reveal contingency plans.

What’s behind Europe’s banking surge?

Investment banking fees and M&A activity—areas where US firms face tighter competition.

Will the US-G20 rift impact markets?

Short-term, it’s noise. Long-term, eroding trust in global cooperation could spell trouble.