JP Morgan, Wells Fargo, And Citigroup Lining Up To Kick Off Earnings Season
He’s expected to deliver his latest views of the economy and the effect of the crisis on banks and other industries as JPM reports Q2 earnings. Sometimes, Dimon’s words can move the market, so there’s potentially money riding on whether he sounds sunny or concerned about the economy and his industry. The big banking sector, including JPM, has been remarkably profitable in spite of challenges even before COVID-19, but the industry’s ability to grow earnings could continue to be challenged by low-interest rates and high U.S. unemployment, according to research firm Briefing.com. While no sector is immune to the virus, few arguably have as much exposure as Financials. The drop to zero rates hit Financials hard in the first half, most likely eating into their profitability. However, the numbers in Q2 might get brushed aside a bit by investors, who go in well aware that the banks faced major challenges as far as net interest margin during the quarter. In this sense, JPM and the other big banks—whose stocks have also generally languished—seem to be playing in the same ballpark as Treasury yields—which have remained stubbornly low despite the stronger economic data and rising stock market. While much of the market has rallied based on the hope that reopening will bring bigger and better things, banks don’t seem to be joining in with that idea.