The third-quarter earnings season gets its traditional start this week as America’s biggest banks open their books. JPMorgan Chase, Goldman Sachs, Wells Fargo and Citigroup are all scheduled to report before the market opens on Tuesday, October 13, followed by Bank of America, Morgan Stanley and BlackRock on Wednesday. With interest rates rising again and markets swinging on war headlines, investors will be reading these results for clues about the health of the wider economy.
The numbers analysts expect from JPMorgan
According to consensus figures compiled by MarketBeat, Wall Street expects JPMorgan to earn about $5.93 per share on revenue of roughly $51.2 billion. A year earlier the bank reported $5.07 per share on $47.1 billion of revenue, so the forecasts imply growth of about 17 percent in earnings and close to 9 percent in revenue. JPMorgan has beaten consensus earnings estimates in each of its last eight quarters, and its market value has been approaching the $1 trillion mark ahead of the report.
Five themes to watch
1. Net interest income. The Federal Reserve’s September rate increase, its first since 2023, should help lenders earn more on loans than they pay on deposits. Investors will want to know whether banks are passing higher rates on to savers or holding on to the extra margin.
2. Trading revenue. Volatility tends to be good for trading desks. Swings in oil, bonds and currencies since the Iran war began have kept markets active, and Goldman Sachs and Morgan Stanley are especially sensitive to that business.
3. Investment banking and deals. Heavy corporate borrowing tied to artificial intelligence investment, plus a pipeline of large share offerings, could support fees. The open question is whether higher yields have caused some companies to delay deals.
4. Credit quality. Higher fuel costs and borrowing rates squeeze households and small businesses. Provisions for loan losses, particularly on credit cards and commercial real estate, will show whether banks see trouble ahead.
5. Management commentary. Chief executives often use earnings calls to share their view of the consumer and the economy. Remarks on spending patterns, energy costs and the outlook for rates could move markets as much as the numbers themselves.
The rest of the week’s calendar
- Tuesday, October 13: JPMorgan Chase, Goldman Sachs, Wells Fargo, Citigroup, UnitedHealth, Johnson & Johnson.
- Wednesday, October 14: Bank of America, Morgan Stanley, BlackRock, State Street, Progressive, ASML, plus the September US inflation report.
- Thursday, October 15: TSMC, Charles Schwab, Ericsson, Alcoa, along with US retail sales.
- Friday, October 16: remarks from Fed Chair Kevin Warsh.
Why it matters
Banks sit at the centre of the economy, lending to households and companies and handling their deposits. Strong results with stable credit quality would suggest the economy is absorbing higher energy costs and rates; rising loan-loss provisions would be an early warning. Follow the results and market reaction in our Finance section.
This article is for information only and is not investment advice.