Trump’s Rebate Checks Are Back — But There’s a Bigger Move (from American Hartford)
It's gonna be a busy week for Big Banks.
JPMorgan, Wells Fargo, Goldman Sachs, Citigroup and BlackRock report earnings today.
So, here's what matters.
The Big Picture
Banking profits are climbing.
Investment banking fees are surging as deals return to Wall Street. Trading desks performed well in Q3. But credit concerns are building beneath the surface.
Consumer loan defaults are ticking up. Commercial real estate remains weak. Net interest margins face pressure as rate cuts materialize.
That gap matters more than you might think.
The main question: Can fee income growth offset pressure from traditional lending?
YTD Return: +31.2%
Market Cap: $846.84B
P/E Ratio: 15.80
Dividend Yield: 1.95%
$JPM ( ▼ 0.91% ) JPMorgan reports Tuesday morning.
Analysts expect earnings of $4.01 EPS on revenue of $41.5 billion. The bank's trading division likely delivered strong results during Q3's market volatility.
Investment banking fees should jump roughly 25% YoY as M&A activity rebounds.
CEO Jamie Dimon warned earlier this year about geopolitical risks and inflation persistence.
"Inflation may persist for some time."
Credit card charge-offs remain elevated compared to pre-pandemic levels. The provision for credit losses will signal management's outlook on consumer health.
Analysts project net income around $12.9 billion for the quarter.
"JPMorgan continues to benefit from scale advantages and diversification across business lines," notes Mike Mayo, Wells Fargo Securities analyst.
Watch for updates on branch expansion plans and technology spending. JPMorgan invested heavily in digital banking and expects those investments to drive efficiency gains. The stock trades near all-time highs despite macro uncertainty.
When banks talk gold, ETF inflows spike.
Jamie Dimon doesn't chase trends. So why's he talking about gold now? JPMorgan’s research describes it as a "golden era."
"I hope and pray there's a soft landing, but the odds aren't that high."
Wells Fargo (WFC)
YTD Return: +12.4%
Market Cap: $252.82B
P/E Ratio: 13.54
Dividend Yield: 2.28%
$WFC ( ▲ 1.39% ) Wells Fargo reports alongside JPMorgan on Tuesday.
The bank continues working through regulatory constraints from past scandals. Asset cap limitations restrict balance sheet growth, forcing focus on fee income and efficiency.
Analysts expect $1.28 EPS on $20.4 billion revenue.
Net interest income faces headwinds from lower rates and deposit mix shifts. The bank's mortgage business remains under pressure as refinancing activity stays muted.
But there's progress. Wells Fargo reduced expenses and improved operational efficiency. The wealth management division shows momentum. Credit quality metrics should hold steady.
"Wells Fargo is in the middle innings of a turnaround. The question is when regulatory relief arrives and what that means for capital deployment."
Management commentary on the asset cap timeline matters. Any hint of regulatory progress could move the stock. The bank also faces questions about its commercial office loan portfolio and potential losses.
Goldman Sachs (GS)
YTD Return: +36%
Market Cap: $238.17B
P/E Ratio: 17.34
Dividend Yield: 2.03%
$GS ( ▲ 0.78% ) Goldman Sachs reports Tuesday and should deliver strong results.
Investment banking fees are rebounding as companies pursue M&A and debt refinancing. Equity and debt underwriting picked up in Q3. Trading revenue likely exceeded expectations.
Analysts estimates point to $8.42 EPS on $12.4 billion revenue. That represents significant growth from last year. Goldman's fixed income, currency, and commodities trading desk typically performs well during volatility.
The consumer banking retreat continues. Goldman scaled back Marcus and credit card partnerships after losses mounted. Now it refocused on core strengths: trading, investment banking, and wealth management.
"Goldman is hitting its stride as deal activity normalizes.The retreat from consumer banking removes a distraction and capital drag."
Goldman Sachs also faces questions about commercial real estate exposures and potential markdown pressures in private equity holdings.
Citigroup (C)
YTD Return: +36.53%
Market Cap: $176.91B
P/E Ratio: 14.21
Dividend Yield: 2.50%
$C ( ▲ 1.14% ) Citigroup reports Tuesday afternoon.
CEO Jane Fraser's transformation plan enters a critical phase. The bank is exiting multiple international consumer markets and investing heavily in risk and control infrastructure.
Analysts expect $1.40 EPS on $20.1 billion revenue. The services division, which handles treasury and trade solutions for corporations, should deliver solid results. Trading revenue likely stayed strong given market conditions.
Investment banking fees are recovering but remain below peaks. Credit costs will draw attention as economic uncertainty persists. Citigroup's international exposure provides diversification but also adds complexity during global slowdowns.
"Citigroup is reshaping itself into a simpler, more focused institution. Execution risk remains elevated given the scope of change."
The efficiency ratio needs improvement. Fraser committed to hitting specific return targets by 2026. Progress on expense reduction and business exits will determine whether the stock re-rates higher. Regulatory issues also linger.
BlackRock (BLK)
YTD Return: +16.8%
Market Cap: $188.5B
P/E Ratio: 27.92
Dividend Yield: 1.80%
BlackRock, the world's largest asset manager, reports Tuesday.
$BLK ( ▲ 0.48% ) manages $10.5 trillion in assets. Flows into ETFs and private markets drive growth. Technology revenue from the Aladdin platform adds diversification.
Analysts expect $11.12 EPS on $5.2 billion revenue. Equity market gains boosted assets under management. ETF inflows remained robust as investors favored passive strategies. Private markets business continues expanding.
The Aladdin platform serves clients globally and generates recurring revenue. BlackRock also benefits from the shift toward index investing and retirement savings growth. Operating margin should stay elevated.
"BlackRock's scale advantages are difficult to replicate. The combination of ETF dominance and technology offerings creates multiple growth vectors."
Are you actually following what big banks say about Gold?
BlackRock and Goldman run the ETF products that funnel money into gold.
The pattern is clear. So are you in?
What It Means for Banking
These earnings reveal the state of US finance.
Deal activity is back. Investment banking fees are rising as companies pursue mergers and refinancing. The M&A drought is ending. IPO markets are reopening. That benefits Goldman Sachs and JPMorgan Chase most directly.
Credit concerns are growing. Consumer loan defaults are increasing from historically low levels. Commercial real estate remains problematic. Banks are setting aside more reserves. The question is whether this normalizes or accelerates.
Rate cuts create winners and losers. Lower rates pressure net interest margins but support loan demand and trading activity. Banks with diversified revenue sources fare better. Those dependent on net interest income struggle.
"The banking sector faces crosscurrents," notes Chris Kotowski, Oppenheimer analyst. "Strong capital markets activity offsets challenges in traditional lending businesses."
The regulatory environment remains uncertain.
Capital requirements, stress tests, and merger approvals affect strategy.
Management commentary on policy expectations will shape investor sentiment.
These reports set the tone for financial sector performance through year-end.
The results will either confirm the rally or raise questions about sustainability.
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