As the markets experience downdrafts and volatility, the major banks and broker-dealers are set to report earnings. Friday’s announcements include performance updates from JPMorgan, Citigroup and Wells Fargo.
As a group, the KBW Bank Index weakened almost 2% on Thursday, more than the broader market indexes, which were down about 1.7%. Year to date, the bank index is down 4.6%, and the KBW Broker-Dealer Index is off about 2% for the year. That compares to a 1.6% uptick in the S&P 500 so far in 2018.
“We expect relatively lackluster 3Q18 earnings results for the banks, given both formal and informal downward revisions to loan growth and net interest margin outlooks coming out of several investment conferences last month,” according to a recent report by Raymond James analyst David Long and his colleagues.
“Indeed, with relatively soft industry loan data this quarter coupled with the impacts from the flattening yield curve and little change in short-term Libor rates, we see earnings outlooks continuing to be rationalized intro/through the reporting period.”
Analysts with Keefe, Bruyette & Woods (now owned by Stifel) expect JPMorgan’s earnings to come in at $2.32 per share, ahead of consensus estimate on higher revenues.