JPMorgan Earnings Top, Kicking Off Big Week For Bank Stocks

JPMorgan Chase (JPM) reported better-than-expected third-quarter earnings early Wednesday, kicking off a huge week for bank financials.  JPM stock was little changed before the open.


JPMorgan stock has gained more than 10% in the last few weeks, thanks to a rising 10-year Treasury yield. But JPM and other bank stocks have pulled back somewhat in recent days.

Banks’ interest revenue had been flat in recent quarters, but could rise for Q3 as interest rates have inched up, allowing banks to earn better returns from their cash balances. They can also charge higher rates for consumer and commercial loans, bringing in higher margins and profits.

Investment banking is expected to boost profits, fueled by strong equity trading volume and brisk M&A activity. Bank earnings may also get a lift from stock buybacks in the quarter.

JPMorgan is among several major U.S. banks expected to report mixed Q3 earnings this week. On Thursday, Bank of America (BAC), Citigroup (C), Morgan Stanley (MS) and Wells Fargo (WFC) report. And Goldman Sachs (GS) reports on Friday.

JPMorgan Chase Earnings

Estimates: FactSet analysts expected JPMorgan earnings per share of $2.93, vs. $2.92 for the same period last year. Revenue is seen coming in at $29.8 billion, slightly below the year-ago figure of $29.9 billion.

Results: JPMorgan earnings per share popped to $3.74 a share. Revenue rose slightly to $30.44 billion.

JPMorgan released $2.1 billion from credit reserves, boosting EPS by 52 cents.

Equity trading revenue jumped 60%, offsetting a 30% fixed-income trading decline.

JPM Stock

Stock: Shares edged higher before the open on the stock market today. JPM stock is in buy range from a cup-with-handle buy point of 163.93, according to MarketSmith chart analysis.

JPMorgan’s relative strength line is trending downward, after recently notching highs not seen since June. Its RS Rating is 82 out of 99, while its EPS Rating is 94.

Bank Of America Earnings

Estimates: Analysts expect Bank of America earnings per share to rise 40% to 70 cents on a 6.5% increase in sales to $21.66 billion.

Results: Check back Thursday.

Citigroup Earnings

Estimates: Views are for Citigroup earnings of $1.80 a share, 28% higher vs. year earlier, with sales down 1.4% to $17.1 billion.

Results: Check back Thursday.

Morgan Stanley Earnings

Estimates: Morgan Stanley earnings per share should come in around $1.69, vs. $1.59 in the same quarter a year ago, on sales of $13.9 billion, 19% better than last year.

Results: Check back Thursday.

Wells Fargo Earnings

Estimates: Wells Fargo earnings per share is seen at 96 cents. That would more than double the year-earlier figure, in which Wells Fargo had unusual expenses. But revenue is seen slipping 3.7% to $18.2 billion.

Results: Check back Thursday.

Goldman Sachs Earnings

Estimates: Goldman Sachs earnings per share of $9.99, 3% above the year-ago quarter, on an 8% sales increase to $11.7 billion.

Results: Check back Friday.

Bank Stocks

Goldman Sachs was up 0.3% 386.50. GS stock has a flat base buy point of 420.86. It RS line is going sideways, but its RS Rating is a solid 86. Its EPS Rating is 94.

Bank of America shares slipped 0.6% at 43.51. Its relative strength line is trending downward, but is still near highs.

Morgan Stanley was up 0.5% but trading below its 50-day line.

Citigroup fell 1.5% to 70.63, while Wells Fargo stock declined 1.3% to 46.66.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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