A sign that Wall Street is going to have a lousy Christmas

It was a rough quarter for Wall Street banks last time around, and at least one team of analysts doesn't think this one will turn out any better.

Deutsche Bank's Matt O'Connor wrote in a note on Monday that he's lowering his fourth-quarter earnings-per-share estimates for major US banks by 7% on average.

"Expectations seemed reasonably low coming out of 3Q, but recent [management] commentary and data suggest revenues may be even weaker than expected," O'Connor wrote.

"Our reductions primarily reflect weaker fixed income trading and ibanking revenues," he said.

The note focuses on Goldman Sachs, Morgan Stanley, JPMorgan, Citi, and Bank of America Merrill Lynch.

Last week, JPMorgan's corporate and investment bank chief, Daniel Pinto, said that the bank would see fourth-quarter trading revenues fall by about 15% from the third quarter.

Here are all of Deutsche Bank's fourth-quarter estimates. They are 6% below consensus.

Investment banking revenues "seem to be tracking weaker than expected," O'Connor wrote. He expects investment banking fees to decline nearly 10% year on year.

M&A and equity capital markets activity are "flattish" or flat compared to a year ago, while debt capital markets activity is weak across the board, according to the note.

In fixed income, currencies, and commodities, O'Connor noted that macro products like rates and foreign exchange have softened because of less volatility, "flattish" dealer inventory, and clients who appear to be waiting to see what the Federal Reserve and European Central Bank will do in December.

Credit and mortgage issuance is sluggish, while in equities, cash volumes are weak.

Here's how O'Connor's team thinks trading will compare with prior periods at each of the banks:

• At Goldman Sachs, FICC was weak in the second and third quarters, so revenues could rise slightly, quarter on quarter, despite there being no material improvement.
• Morgan Stanley's third-quarter FICC weakness "seemed to suggest 4Q overall may not be much better." There is also new management overseeing that division, so it could take some time for them to figure out their strategy.
• For JPMorgan, O'Connor expects a 15% seasonal decline from the third quarter, as has been the trend in recent years.
• Bank of America and Citi should both have an easier time matching their performance, year on year, as they both had weak fourth quarters last year in FICC.
• Citi had a one-time write up in the third quarter, which makes it a tough comparison.