With earnings season well underway, it's important to note that the fourth quarter is typically weak in trading,Brad Hintz, senior analyst at Sanford Bernstein and former CFO at Lehman Brothers, told CNBC on Tuesday.
"I don't think anyone is looking at Q4 [fourth-quarter earnings] to be a great trading quarter. Once bonuses are determined, the traders go on vacation. So sometime in mid-November, nobody is really working on the trading floor, they are playing defense," Hintz said.
"Looking forward, what we are going to be looking for is M&A equity underwriting. The numbers out of Citigroup said equity underwriting is strong. That backs up the idea that we're getting an equity underwriting boom," he said.
On the credit side, the Citi numbers looked okay, Hintz said.
"That's a cycle that we are seeing with everyone else," he said.
With Goldman Sachs set to report earnings on Wednesday, everyone is anticipating that comps will go down, Hintz said.
"If you look at the total pool, what that says is for a Goldman Sachs...whose pool grew, but the comp per-employee dropped," he said, adding, "that's what one would expect."
"The question for Goldman is, when we begin to see Basel III (financial rules) hitting, what are you going to do with that surplus capital?," Hintz said.
Back in December, Hintz told CNBC that the next economic cycle will be more M&A activity (click here to read more).
Watch CNBC's "The Strategy Session" weekdays at Noon ET.