- Citigroup (C +1.1%) starts off the Q4 earnings season Monday, amid analyst reports conveying muted expectations. Analysts have been trimming earnings estimates and cutting ratings, with Goldman Sachs (GS +0.3%) estimates reduced the most, according to Bloomberg.
- Citi warned last month that it may fall "slightly short" of its 2018 efficiency target as fixed-income trading revenue and investment banking revenue decline from a year ago, but equity trading revenue will increase.
- JPMorgan Chase (JPM -0.3%) says trading results are "roughly equivalent" to last year.
- A quiet Q4 for equity issues and M&A will affect investment banking revenue. Healthy loan growth, though, should bolster net interest income.
- “Overall, we expect accelerating loan growth versus recent quarters, stable to slightly higher NIMs, low single digit quarter on quarter NII growth, stable credit quality, and challenging capital markets income,” according to a note by UBS analysts led by Saul Martinez.
- But investors and analysts will be keeping an eye on credit quality metrics for signs of danger.
- Goldman's results will be scrutinized to see how much the 1MDB Malaysian fund scandal is costing the bank.
- JPMorgan Chase and Wells Fargo (WFC +0.5%) report on Tuesday, followed by Bank of America (BAC +0.9%) and Goldman Sachs on Wednesday, and Morgan Stanley (MS +0.1%) on Thursday.
- Previously: Wall Street scales back expectations on bank earnings (Jan. 7)
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