4 Reasons To Invest in Banking Stocks Like Goldman Sachs and JP Morgan Ahead of Spring

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One of the hallmarks of the banking industry, and indeed many sectors of the overall stock market, is seasonality. Some businesses simply tend to perform better during different times of the year due to both consumer trends and macroeconomic factors. These types of stocks are known as cyclicals, and banks are among the most prominent.

Although not all banks move in lockstep, Goldman Sachs and JPMorgan Chase are among the industry leaders, so they often chart the direction for their fellow financial services firms.

While seasonality shouldn’t be the only reason that you invest in a stock, here are some of the reasons why big bank stocks like Goldman Sachs and JPMorgan Chase may have a good spring ahead of them. 

Demand for Loans Begins Increasing

Loans are one of the key profit drivers for banks. The entire banking sector is built on the premise of taking in money from depositors and loaning it out to businesses and individuals at higher rates.

While that’s obviously a gross simplification of how banking works, the bottom line is that when demand for loans increases, so too do bank earnings. Springtime is generally when contractors and other businesses start borrowing more money as their seasonal workflow picks up. This can translate to increased earnings for banks.

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Overall Economic Activity Picks Up

Although the severity of winter varies from state to state and city to city, overall economic activity tends to pick up as the country comes out of its winter thaw. According to the Chicago Fed, employment tends to pick up in spring, which puts more money in the pockets of consumers, who are large drivers of the U.S. economy.

Housing construction, listings, and sales tend to pick up as the weather improves, and the auto industry typically does better in spring and summer as well. And when general economic activity increases, so too does banking activity.

Taxpayers Receive Their Refunds

The consumer is by far the biggest driver of the U.S. economy. According to the U.S. Bureau of Economic Analysis, consumer spending was responsible for 68% of the entire U.S. gross domestic product (GDP) in quarter four of 2024.

So, when the consumer has money and spends it, economic activity picks up. This includes financial institutions like Goldman Sachs and JPMorgan Chase, which benefit from increased deposits, credit card usage, investments and other financial transactions. So, when taxpayers receive their refunds in April every year, it sets in motion all of this economic activity, much of which trickles down to the banks.

IPO Activity Tends To Increase

Although Goldman Sachs and JPMorgan Chase benefit from the banking activities of individual consumers, they also generate a large percentage of their income from investment banking. When companies go public, for example, they need a bank — or typically, a team of banks — to underwrite the transaction and facilitate the process. Although this IPO activity generally picks up when equity markets are hot, it also carries a seasonal component, with spring and summer seeing more companies come to market. 

According to PriceWaterhouse Cooper, IPO activity is expected to pick up greatly in 2025, in part due to this seasonal component. That’s another profit source that could benefit both Goldman Sachs and JPMorgan Chase.

Banking is a complex industry that has many moving parts. Changes in interest rates, the state of the U.S. economy, geopolitical turmoil and numerous other factors, including general market sentiment, all play a role in determining the direction of bank stock prices. But both Goldman Sachs and JPMorgan Chase seem to have some seasonal factors in their favor as spring 2025 unfolds.

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