Banks to report earnings
This week, five of the top six commercial and investment banks will report their quarterly earnings. Earnings in the financial sector are considered leading indicators. Wall Street analysts expect an underwhelming earnings season this time. Light bond market activity worsened by the end of June and investor worries coming from Greece and China weighed on bank earnings.
Together, these five banks constitute ~28% of the Financial Select Sector SPDR ETF (XLF). Analysts on Wall Street expect a muted earnings season this time, with the S&P 500 shrinking 4% and EPS (earnings per share) contracting.
Although a rate hike looks imminent now, earnings forecasts for these top banks don’t seem to reflect much enthusiasm.
- JP Morgan Chase (JPM) will be the first to report earnings early on Tuesday. Analysts expect earnings per share (EPS) to come in at $1.44, down 1.4% year-over-year.
- Wells Fargo (WFC) reports on the same day as JPM. Analysts forecast a consensus EPS of $1.03 for the quarter. This is a slight increase from the EPS of $1.01 reported in the same quarter last year.
- Bank of America (BAC) reports on Wednesday, July 15. Analysts expect EPS to come in at $0.36.
- Citigroup (C) and Goldman Sachs (GS) report on Thursday. Analysts expect second-quarter EPS of $3.99 for Goldman. Meanwhile, for Citigroup, analysts expect EPS of $1.35 for the quarter.