JPMorgan Chase is set to report third-quarter income before the opening bell on Friday.
According to analyst projections compiled by LSEG, previously known as Refinitiv, here is what Wall Street predicts.
- Earnings per share: $3.96
- Revenue: $39.96
JPMorgan will be scrutinized for hints about how the industry performed in the face of rising interest rates and loan losses.
While the largest bank in the US has handled variable interest rates well so far this year, the issue has caught other peers off guard, such as a trio of midsized lenders that failed after deposit runs.
Last month, bank stocks plummeted as the Federal Reserve warned that it would hold interest rates higher for longer than expected to combat inflation amid unexpectedly strong economic growth. The yield on the 10-year Treasury note, an important figure for long-term rates, climbed 74 basis points in the third quarter. A basis point constitutes one-hundredth of a percentage point.
Higher rates have numerous consequences for the banks. The industry has been pressured to pay up for deposits as customers transfer holdings into higher-yielding instruments such as money market funds. Growing gains imply that the bonds owned by banks slip in value, resulting in unrealized losses that put pressure on capital levels. Furthermore, increased borrowing prices dampen demand for mortgages and corporate loans.
Banks, including JPMorgan, have also increased their reserves for expected loan losses.
Wall Street may provide little assistance this quarter, with investment banking fees predicted to remain low and trading revenue expected to be flat or slightly down.
Finally, analysts will be interested in hearing CEO Jamie Dimon’s thoughts on the economy and his outlook for the banking industry. Dimon has been outspoken in his opposition to planned capital requirement increases.
JPMorgan shares have risen 8.7% year to date, surpassing the KBW Bank Index’s 19% fall.
Wells Fargo and Citigroup are set to report earnings later Friday morning. Bank of America and Goldman Sachs report on Tuesday, while Morgan Stanley reports on Wednesday.
