Trump’s Fannie Mae, Freddie Mac Plan Could Boost These Two Big Bank Names

We are witnessing M&A activity continue as Motorola Solutions MSI scooped up radio maker Silvus Technologies for $4.4 billion; Zscaler ZS will acquire Red Canary, a leader in managed detection and response; and Hologic HOLX agreed to be acquired by TPG TPG and Blackstone BX.

There is also speculation following Skechers' SKX going private transaction with 3G Capital that other retailers may opt to go private should Trump trade talks take an extended period of time. Given Treasury Secretary Scott Bessent’s comment a few weeks back that 80% to 90% of trade deals would be finalized by the end of 2025, we could see a few more going private transactions in the coming months. That, along with potential deregulation expected in Trump’s “big, beautiful bill,” suggests a continued flow of M&A deals, which bodes well for our shares of Bank of America BAC and Morgan Stanley MS.

Sticking with those two holdings, we are intrigued by comments from Trump about potential public offerings for Fannie Mae and Freddie Mac, both of which have been in conservatorship since the 2008 financial crisis. Such a move would be a boon for investment banking activity and fees, but as we’ve seen with Trump, we’ll want to see further movement on this front lest we jump to any false conclusions.

While we see what develops, we’d note that, so far, the post-IPO performance of Hinge Health (HNGE) and MNTN Inc. (MNTN) remains favorable relative to their respective IPO pricings of $32 and $16 per share. The next higher-profile IPO pricing is slated to occur next week for stablecoin company Circle (CRCL), which is expected to price 24 million shares between $24 and $26. Should favorable post-IPO trading performance continue, the more likely we’ll see IPOs in the wings, like Klarna, Chime, StubHub, and others come to market. As that happens, even though we recently upped our price targets for MS and BAC shares, we’ll revisit those new levels as needed.

For now, as it relates to our position in MS shares, we have some room to round out the Portfolio’s position size. While our rating is a One, given the existing position size it means we will need to be more selective with our next and potentially last bit of shares. We see strong support near $117, which is the intersection of the 50- and 200-day moving averages and depending on what may have driven them to that level, we may opt to make such a move.

With BAC shares, given that they account for 3.9% of the Portfolio’s assets, we have a similar situation. While we see multiple levels of support in the chart between $42 and $43, we also see a few gaps as well, which means taking a more mindful approach to adding any additional shares to the Portfolio.

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At the time of publication, TheStreet Pro Portfolio was long MS and BAC.