The third-quarter earnings season is well underway with big banks leading the march out the door.
The attention on the sector is intense given recent interest rates moves from the inversion of the yield curve earlier in the year to recent short-term interest rate cuts from the Federal Reserve. And let’s not forget about the stress being felt in the short-term lending market as repo liquidity dries up, forcing the Fed to conduct capital injection operations.
So far, earnings have delivered fairly good news as investors bid up shares of key names. Here are seven worth a look:
Citigroup (NYSE:C) helped kick things off on Tuesday morning, reporting earnings of $1.97 per share which beat estimates by two cents. Revenues grew 5.1% from the prior year. The result was driven by a 10% reduction in the number of shares outstanding and a lower tax rate.
Shares are testing the upper end of a multi-month consolidation range going back to May. Watch for a run to the prior highs set in early 2018 near the $77 per share level, which would be worth a 10% gain from here.
Goldman Sachs (GS)
Goldman Sachs (NYSE:GS) also reported on Tuesday, with earnings of $4.79 per share missing estimates by 10 cents on a 3.8% decline in revenues. The big news for the company during the quarter was the launch of a co-branded credit card with Apple (NASDAQ:AAPL) in partnership with Mastercard (NYSE:MA).
Shares are pushing higher through the 50-day moving average after bouncing off of the 200-day average multiple times over the past three months.
JPMorgan Chase (JPM)
JPMorgan Chase (NYSE:JPM) was another Tuesday morning reporter, with earnings of $2.68 per share beating results by 22 cents on a 7.6% rise in revenues. The company got a lot of attention this week when CEO Jamie Dimon warned that “there’s a recession ahead” thanks to ongoing trade tensions with China. He clarified that while one is coming, we “don’t know if it’s going to happen soon.” Super helpful, thanks.
Shares of JPMorgan are pushing to new highs, breaking out of a long consolidation range going back to early 2018.
Wells Fargo (WFC)
Wells Fargo (NYSE:WFC) was the final large bank stock to report on Tuesday, with earnings of 92 cents per share missing estimates by 26 cents on a 0.3% rise in revenues. The company reported that growth in loans and deposits was in the low single digits year-over-year.
Wells Fargo shares are pushing higher, breaking out of the year-to-date trading range between $45 and $50.
Bank of America (BAC)
Bank of America (NYSE:BAC) reported on Wednesday morning, with earnings of 75 cents per share beating estimates by seven cents on a 0.3% rise in revenues from the prior year period. Net interest yield declined four basis points, showing good discipline in a tough rate environment.
Shares are pushing to the upper end of a two-year consolidation range and look ready for a breakout into the mid-$30s driven by momentum in its equity trading activity.
Bank of New York Mellon (BK)
Bank of New York Mellon (NYSE:BK) reported earnings of $1.07 per share on Wednesday morning, beating estimates by eight cents despite a 5.1% decline in revenues. Shares were recently updated to “Peer Perform” by analysts at Wolfe Research.
Management is focused on growing fee revenue in its investment services division, offset by headwinds from net interest margins and deposits.
Morgan Stanley (MS)
Morgan Stanley (NYSE:MS) will report results on Thursday morning. Analysts are looking for earnings of $1.12 per share, which would be a five-cent decline from the result a year ago. Shares are perking back up above its 200-day moving average.
Watch for a move back to the late April highs, which would be worth a gain of nearly 12% from here. Shares were recently upgraded from “buy” to “hold” at Sandler O’Neill.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.