Investors on Wall Street (SPY) are eagerly awaiting the earnings of the financial sector (XLF), which serve as a barometer for economic health. Bank of America (BAC) is set to declare its 4Q16 earnings on January 13, 2017.
Wall Street banks such as Wells Fargo (WFC), Citigroup (C), Bank of America, and JPMorgan Chase (JPM) expect their fourth-quarter earnings to pick up. Trading revenues are expected to grow, as market sentiments have become positive on the back of growing economic fundamentals.
Banks’ margins should also get a bump following the Federal Reserve’s recent 25-basis-point rate hike. Oil prices are rebounding from historical lows, and fears of defaults on loans are easing. All these factors point to a bright earnings season for the banking sector.
According to consensus data accumulated by Reuters, BAC’s net revenue is expected to be $21 billion in 4Q16, a 7% rise year-over-year (or YoY). Its net income is expected to be $4.1 billion in the quarter, compared to $3.1 billion in 4Q15 and $4.5 billion in 3Q16.
Lastly, BAC’s earnings per share (or EPS) are expected to be $0.38 in 4Q16, 35% higher YoY. In the previous quarter, Bank of America reported EPS of $0.41.