Trump admin proposes letting companies report earnings only twice a year

The SEC has proposed allowing public companies to report earnings and financials twice a year instead of quarterly, subject to a 60-day public comment period and eventual SEC approval. The change would give firms regulatory flexibility and could reduce reporting costs, but critics warn it may lower transparency and accountability and increase cost of capital. The proposal is politically backed by President Trump and supported by some CEOs, while opponents argue U.S. markets benefit from quarterly disclosure.

Analysis

The first-order read is lower disclosure frequency, but the second-order effect is a regime shift in information velocity: earnings-day vol likely compresses while the uncertainty premium between reports expands. That tends to favor franchises with stable fee/earnings power and management teams that can credibly signal through non-GAAP KPIs, and it hurts businesses whose valuation depends on frequent narrative resets. For GS and JPM, the headline is not lower compliance cost; it is less forced near-term scrutiny, which can modestly improve management flexibility but also reduces the market’s ability to quickly re-rate changing deposit, credit, or trading trends.

Banks are a special case because they already operate with rich regulatory disclosure, so the practical benefit from fewer public updates is limited relative to industrials or consumer names. That means the main impact may be on valuation multiples rather than fundamentals: a more opaque reporting cadence can support a slightly higher “execution discount” for the best operators and a wider discount for those with mixed credit quality or cyclical earnings. JPM likely benefits more than GS because its recurring earnings mix and balance sheet transparency make it easier to survive longer reporting gaps, whereas GS’s higher sensitivity to episodic markets activity could see larger skepticism if disclosure cadence slips.

The market is likely over-indexing on cost savings and underestimating behavioral effects: fewer reports can slow the feedback loop for management, investors, and activists, which may encourage a bit more risk-taking late in cycles. Over months, that could matter more for credit/lending businesses if underwriting drifts before the next formal checkpoint. The tail risk is political reversal or a watered-down rule after public comment; the proposal itself is not yet tradable as policy, so the right horizon is months, not days.

Contrarian view: for large-cap financials, less reporting may actually reduce short-term trading noise without meaningfully lowering long-term transparency because the Street will still demand quarterly sell-side updates, channel checks, and regulator data. If that’s right, the move is more symbolic than structural, and the biggest winners may be companies with the weakest quarterly optics rather than the highest quality operators.

Key Decisions for Investors

• Short-dated: sell volatility in GS and JPM around the proposal headline via covered calls or call spreads over the next 2-6 weeks; thesis is headline decay and low near-term policy certainty, with defined upside cap if the proposal stalls.
• 3-6 month relative value: go long JPM / short GS on any wide spread caused by the policy debate; JPM should be viewed as the cleaner beneficiary because recurring earnings and stronger balance-sheet visibility can better absorb lower reporting frequency.
• For event-driven accounts: buy a small basket of low-transparency, high-execution-quality names on a 6-12 month horizon if the SEC advances the rule; the beneficiaries are firms where reduced quarterly scrutiny gives management more flexibility to smooth investment cadence.
• Hedge policy risk: pair any long banks exposure with a short in an information-sensitive, highly cyclical financial or consumer name to isolate the transparency effect versus the broader market beta.
• If the proposal survives public comment, consider long-dated call spreads in GS or JPM only after confirmation of final rule language; premature positioning has poor risk/reward because the current setup is more political than fundamental.