Earnings Watch: JPMorgan, Citi, Morgan Stanley and Wells Fargo kick off bank earnings season in choppy waters

by | Oct 7, 2022 | Stock Market

JP Morgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Morgan Stanley kick off the third-quarter bank earnings reporting season on Friday, Oct. 14 amid some of the most challenging economic times in at least a decade. Despite a plethora of woes facing the big banks from inflation and recession jitters to the health of European banking giant Credit Suisse AG
CS,
+12.82%,
Wall Street analysts have not drastically cut their earnings outlooks for the group.

The sector’s weak stock prices come amid a slowdown in investment banking, layoffs in mortgage units, and decreased demand for car and home financings due to higher interest rates in 2022. Also Read: Citi analyst sees JPMorgan beating earnings target as a ‘stronger conviction’ buy See: JPMorgan and Goldman are still top dogs in investment banking but business shrinks significantly in 2022 Dave Wagner, portfolio manager and analyst at Aptus Capital Advisors, which manages the Optus Small Cap Value ETF
OSCV,
-2.06%
and the Aptus Collared Income Opportunity ETF
ACIO,
-1.32%,
said negative sentiment has swamped the banks, even as they continue to benefit from higher interest rates. “People don’t’ understand, there is still loan demand out there,” Wagner said. “Banks can still benefit from higher average yields and excess liquidity put back to work.” But bad news continues to pile up around banks, with fresh reports on how Morgan Stanley
MS,
-2.94%
and Bank of America
BAC,
-2.51%
are among the banking syndicate expected to lose a combined $500 million on providing debt for Elon Musk’s $44 billion acquisition of Twitter Inc.
TWTR,
-0.18%,
as reported by 9f …

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