Bank Stocks Gain Ahead Of Q3 Earnings Reports

Major U.S. banks are expected to report mixed Q3 earnings next week, while bank stocks climb higher as the 10-year Treasury yield tops 1.5%.


JPMorgan Chase (JPM) reports Wednesday. On Thursday, Bank of America (BAC), Citigroup (C), Morgan Stanley (MS) and Wells Fargo (WFC) report. And Goldman Sachs (GS) reports on Friday.

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.

Revenue from interest has been flat in recent quarters, but could rise for Q3 as interest rates have inched up and demand for loans have picked up. Banks benefit from rising interest rates, which bring in higher margins and profits.

JPMorgan Chase Earnings

Estimates: FactSet analysts expect EPS of $3.01, a 3% increase from the same period last year. Sales are seen coming in at $13.2 billion, slightly higher than the $13.1 billion a year ago.

Results: Check back Wednesday.

Bank Of America Earnings

Estimates: Analysts expect EPS of 71 cents, 39% higher vs. a year ago, on a 6.5% increase in sales to $21.66 billion.

Results: Check back Thursday.

Citigroup Earnings

Estimates: Views are for EPS of $1.73, 24% above the year-ago quarter, on a 1.4% decline in sales to $17.05 billion.

Results: Check back Thursday.

Morgan Stanley Earnings

Estimates: EPS 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: EPS is seen at $1, more than double the year-ago figure, in which Wells Fargo had unusual expenses. But sales are seen slipping 3.7% to $18.2 billion.

Results: Check back Thursday.

Goldman Sachs Earnings

Estimates: EPS of $10.17, 5% above the year-ago quarter, on an 8% sales increase to $11.7 billion.

Results: Check back Friday.

Bank Stocks

JPMorgan shares rose 0.3% to 170.66 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 up. Its RS Rating is 84 out of 99, while its EPS Rating is 94.

Goldman Sachs rose 0.7% to 393.39. GS stock has a flat base buy point of 420.86. It RS line is going sideways, but its RS Rating is a solid 88. Its EPS Rating is 94.

Bank of America shares climbed 1.4% to 44.69. Its relative strength line is trending upward, near highs.

Morgan Stanley climbed 1.6%, but is trading below its 50-day line.

Citigroup was up 0.4%, while Wells Fargo gained 0.8% to 48.17.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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