Listen and subscribe to Opening Bid on Apple Podcasts, Spotify, YouTube or wherever you find your favorite podcasts.

DAVOS, SWITZERLAND — Companies may be going whale-hunting as the Trump administration aspires to loosen up regulations.

"I think the regulatory regime is going to be balanced. I don't think there's going to be some kind of unfettered unleashing of anticompetitive dynamics of company A and company B suddenly owning a market space," Morgan Stanley chairman and CEO Ted Pick said on Yahoo Finance's Opening Bid podcast at the World Economic Forum (video above; listen in below).

Pick continued, "I think net-net, of course, the deregulatory wave is going to be beneficial to energy companies, financial companies, and retailers, so I think there will be some M&A activity."

Bank stocks have been on a post-election upswing, with the KBW Nasdaq Bank Index (^BKX) up 14% since Trump won the presidency. Morgan Stanley has notched a 17% gain.

Investors have a dinner plate to choose from to explain the bullishness.

Under the Biden administration, the Consumer Financial Protection Bureau (CFPB) put forth a host of high-profile rules and saw yawning supervisory authority. Trump is expected to roll back a lot of that authority to free up the banks.

Meanwhile, the pick-up in deal activity could help fuel the lucrative M&A departments of the big banks. Additionally, an increase in M&As could support broader market valuations and bank trading businesses.

Lastly, banks affected by the so-called Basel III endgame may be less so — paving the way for capital to be deployed to increase dividends and buy back shares. 

While the optimism has helped push up bank valuations, the sector itself had a bang-up fourth quarter, and CEOs at the major firms voiced optimism on the outlook for sales and profits. 

Fourth quarter results for big banks like Goldman Sachs (GS), JPMorgan (JPM), and Citi (C) were powered by bumper sales in investment banking and trading businesses. 

Morgan Stanley put up one of the strongest showings in its bread-and-butter businesses. 

Investment banking and equity revenues surged 25% and 51%, respectively, year over year. Wealth management sales rose 14%, supported by the company's acquisitions in recent years of E-Trade and Eaton Vance.

"The company is one of the premier global investment banks and has captured an increasing percentage of the global institutional business wallet of its clients which has contributed to its high levels of profitability," RBC Capital Markets analyst Gerard Cassidy said following Morgan Stanley's earnings results. 

—

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

Three times each week, Sozzi fields insight-filled conversations with the biggest names in business and markets on Yahoo Finance's Opening Bid podcast. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.

Read the latest news and interviews from the World Economic Forum in Davos, Switzerland:

• Trump should create a strategic bitcoin reserve: Coinbase CEO

• A trade war with China is coming as Trump takes office: Bremmer

• Bank of America CEO: The Federal Reserve may have to respond to Trump

• Suntory CEO says the company has stockpiled whiskey in Europe due to possible Trump tariffs

• Trump coin and Melania coin are 'gambling tokens': Anthony Scaramucci

• Nasdaq CEO on corporate America under Trump: Quieter DEI efforts, exciting IPO environment