Friday will bring the start of earnings season from the United States megabanks.
JPM – Daily Chart
The price of J.P. Morgan is trading above a range between the $191 and $205.80 levels. Earnings season could test the 2024 rally in JPM.
J.P. Morgan stock is up 22% year-to-date, and analysts will be studying this earnings season to see if the Bank can meet revenue expectations.
The Bank will release earnings on Friday, joining Citi and Wells Fargo. Goldman Sachs will follow on Monday, and Morgan Stanley will follow on Tuesday.
Unlike rivals Citi, Wells Fargo, and Bank of America, J.P. Morgan is projected to post a higher second-quarter net interest income than a year earlier, according to analyst estimates compiled by Visible Alpha.
“Investors will be watching for signs that the much-awaited bottoming in net interest income is in hand,” said Bank of America Securities analysts.
Commercial Real Estate loans could be a major headache for banks as property owners struggle to refinance loans at higher interest rates. Loan delinquencies are also increasing while property prices plummet.
Jefferies analysts said share buyback programs could slow down given the recent disappointing stress test results. Morgan Stanley continued with a $20 billion buyback program expected to begin in the third quarter of 2024. Goldman Sachs has $23 billion outstanding from a $30 billion program authorised in February 2023.
Jefferies projects $250 million in buybacks starting in the third quarter, down 83% from the pace the Bank set for buybacks in the previous two quarters.
Bank earnings season begins on Friday, and J.P. Morgan Chase, Citigroup, and Wells Fargo are set to release their latest results. Dealmaking revenue is expected to be a highlight for banks this season, with overall US deal value at $535bn during the five months of the year, up 30%, according to PwC.
Bank earnings will be another test for stocks after the S&P 500 -1% drop on Thursday despite softer inflation in the United States last month.
