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Big players are waiting for the banks earnings reports
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Loading...Tax cuts, rising interest rates and a general spirit of more robust economic growth are the principal ingredients in what is expected to be an especially powerful profit formula for the banking industry.
As Wall Street's financial giants get set to report first-quarter earnings and provide a look ahead for the days to come, hopes are high. Corporate profits overall are expected to have risen 17 percent for the three-month period, but the financial sector has drawn especially keen interest.
In just the past three months, analysts have more than doubled their expectations for the financial sector as a whole, with banks leading the way.
Bank earnings are "really going to help provide stability to the market," said JJ Kinahan, chief market strategist at TD Ameritrade. "If [J.P. Morgan Chase CEO Jamie] Dimon comes out and says we're not having a problem with tariffs, that's going to be major. ... If CEOs say they see smooth sailing ahead, it could be an unbelievably great time for stocks."
Just since Jan. 1, analyst projections for financial earnings went from a 10.7 percent gain all the way to 24 percent currently.
Today will feature reports from Citigroup, JP Morgan Chase, PNC and Wells Fargo. They're expected to show respective earnings-per-share gains of $1.61, $2.28, $2.24 and $1.06, according to FactSet.
Goldman Sachs analysts said they "remain constructive" on the banking sector, with more than half the names in its coverage likely to top EPS estimates. The firm's analysts also see strong net interest margins and tax reform as positives, as well as increased volatility helping trading operations and higher interest rates boosting net interest income though having a negative effect on mortgages.
Source: CNBC
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