Big banks are counting down the hours until their earnings season starts.
Starting Tuesday, the biggest banks in the US will report earnings and the financial services sector is considered a forward-looking indicator for markets.
The banks that still process residential mortgages could outpace traditional investment banks, says analyst Christopher Whalen.
He also said that M&A revenue will likely be flat for the second quarter. This could hamper results from some banks. The top M&A bank virtually across the board in the first half of 2015 was Goldman Sachs. Whalen said part of what’s holding some big banks back on M&A revenue is the influx of boutique firms that have tried to eat a growing portion of mega-deals.
It is widely expected that trading revenue will fall at most banks. Factoring in that the Federal Reserve and other prominent bankers and economists have recently spoken out about the lack of liquidity in the market, this could be something that is a prolonged issue on Wall Street.
Here’s what Wall Street is looking for this week:
- Tomorrow, Tuesday July 14 JP Morgan will report earnings at 7 AM. Analysts are looking for earnings per share of $US1.44, slightly down from this time a year ago.
- Also reporting earnings Tuesday July 14 will be Wells Fargo. Here, the market is looking for $US1.03 a share for the bank. That’s a slight increase from the second quarter a year ago. Both JP Morgan and Wells Fargo topped estimates for this quarter a year ago.
- Wednesday July 15, Bank of America will announce earnings. Analysts are looking for $US0.36 in earnings per share for Bank of America, an increase from the same quarter in 2014.
- Thursday July 16 Goldman Sachs will announce earnings at 7:30 AM. Goldman is seeing expectations of about $US3.90 a share for its second quarter earnings — a big increase from this quarter a year ago. Citigroup will follow, reporting earnings at 8 AM. Citigroup beat estimates for the second quarter in 2014 and analysts are expecting earnings per share of $US1.35.
Then, that’s it until next Monday. Morgan Stanley will announce results and Credit Suisse will report earnings on July 28. Deutsche Bank is expected to report earnings on August 4.