"Watch For The Tipping Point": Bank Earnings To Give Key Insight Into Slowing Economy
"Watch For The Tipping Point": Bank Earnings To Give Key Insight Into Slowing Economy Now that the CPI shocker is in the history book, the market has the start of earnings season to look forward to and specifically the big banks starting tomorrow with JPM, Morgan Stanley and Friday when Wells, Citi, PNC and Blackrock all report. What to expect? According to JPM financial sector specialist James Goulbourne, the key cross-currents to keep an eye on are: strong loan growth and rates higher with consumer spending good; offset by markets, regulatory environment and rising loss reserves. Deposit betas have been low so far and loan growth has benefited from a more challenging market. That said, the last updates from large banks about consumer deposit balances were still positive with balances still well above pre-pandemic levels. The JPM analyst also points to near-term raised estimates given NIM and loan growth with volatility helping trading revenues; however, he concedes that the key concern is forward looking issues of recession and|or stagflation and fears Fed moves might lead to hard landing.
"Watch For The Tipping Point": Bank Earnings To Give Key Insight Into Slowing Economy
"Watch For The Tipping Point": Bank Earnings To Give Key Insight Into Slowing Economy Now that the CPI shocker is in the history book, the market has the start of earnings season to look forward to and specifically the big banks starting tomorrow with JPM, Morgan Stanley and Friday when Wells, Citi, PNC and Blackrock all report. What to expect? According to JPM financial sector specialist James Goulbourne, the key cross-currents to keep an eye on are: strong loan growth and rates higher with consumer spending good; offset by markets, regulatory environment and rising loss reserves. Deposit betas have been low so far and loan growth has benefited from a more challenging market. That said, the last updates from large banks about consumer deposit balances were still positive with balances still well above pre-pandemic levels. The JPM analyst also points to near-term raised estimates given NIM and loan growth with volatility helping trading revenues; however, he concedes that the key concern is forward looking issues of recession and|or stagflation and fears Fed moves might lead to hard landing.