Earnings Season Begins With The Big Banks

Buckle up?

Get ready for the coming flood of corporate earnings, with the big banks ready to kick off the festivities. It comes as the trade war is at the top of mind for investors, with many a portfolio seeing volatile moves in recent weeks. Just how much influence this earnings season will have on markets is up for debate, with half of Wall Street Breakfast subscribers saying it won’t have much of an impact.

Snapshot: For Q1 itself, after two “beat and raise” quarters in a row for large-cap banks, Morgan Stanley now expects a “meet and keep” quarter. Given the volatility in markets, “many investors wonder what will even matter this EPS season, as any positive prints will likely be seen as backward-looking and stable-ish outlooks may be met with skepticism,” wrote UBS analyst Erika Najarian.

Even if there is less of an influence on share prices, the big banks will provide an important snapshot of the economy. Non-interest revenue will detail the state of capital markets activity, while provisions for credit losses can provide a window into financial conditions. Consumer spending will also be in the spotlight, and don’t forget comments on the macro situation – like the recent Treasury market turmoil – from some of the biggest CEOs on Wall Street.

The bottom line: JPMorgan CEO Jamie Dimon said this week to “settle down and take a breath,” and the bank’s results will be one of the first out of the gate this morning. Earnings from Morgan Stanley (MS) and Wells Fargo (WFC) are also on tap and commentary there can show how they plan to navigate new uncertainty for divisions like lending, investment banking and capital markets. Will they also factor in a more hawkish Fed in 2025, which can impact expectations for closely watched net interest income?