List of major US banks Q3 earnings forecasts! Are you sad and happy in response to interest rate cuts and changes in regulatory policies?
This Friday, major bank stocks will be the first to announce financial results for the 3rd quarter, and the financial results season will begin.
$JPMorgan (JPM.US)$、 $Bank of New York Mellon (BK.US)$、 $Wells Fargo & Co (WFC.US)$ButFriday before donatingThe Q3 financial results will be announced. Next $Bank of America (BAC.US)$、 $Goldman Sachs (GS.US)$、 $Citigroup (C.US)$ButTuesday October 15It will be announced on. $Morgan Stanley (MS.US)$、 $U.S. Bancorp (USB.US)$tooFinancial results will be announced next Wednesday (10/16)。
$JPMorgan (JPM.US)$、 $Bank of New York Mellon (BK.US)$、 $Wells Fargo & Co (WFC.US)$ButFriday before donatingThe Q3 financial results will be announced. Next $Bank of America (BAC.US)$、 $Goldman Sachs (GS.US)$、 $Citigroup (C.US)$ButTuesday October 15It will be announced on. $Morgan Stanley (MS.US)$、 $U.S. Bancorp (USB.US)$tooFinancial results will be announced next Wednesday (10/16)。
JP Morgan, Bank of New York Mellon, Morgan Stanley, and U.S. Hershey BankUpdate a record highOverall, major bank stocks were strong in the third quarter, and the banking sector is expected to rise due to interest rate cuts. However, according to data compiled by FactSet, the banking industry was the only financial industry in the current quarter,Profit is expected to decrease by -12% compared to the same period last yearIt's there.
Bank of America analysts, Bank of America analysts led by Ebrahim H. PoonawalaMaintaining a cautious and optimistic stance on bank stocksIt shows the view that if soft landing is realized, customer activity will be revitalized, loan growth will increase, and there is a possibility that the stock price-earnings ratio (PER) ratio of the banking sector will eventually rise.
However,Macroeconomic uncertainties, including the possibility of policy changes in the Federal Reserve and the next US presidential electionpresents serious issues that may weaken this outlook.
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Net interest income is the main indicator
As the US Federal Reserve (Fed) interest rate cut cycle continues, the Bank of America is paying attention to net interest margin (NIM) in preparation for financial results announcements. There is a possibility that anticipated interest rate cuts will put pressure on banks' net interest rate income (NII), and it has already been declining for 4 consecutive quarters. Relaxation in interest rates may eventually boost lending growth,The immediate impact will be severe on net interest incomeMaybe.
Since deposit costs are reset faster than loan interest rates, there is a possibility that some cushion will be given to net interest income for the time being. Furthermore, although lower interest rates may promote an increase in lending, no concrete evidence of a recovery in demand for loans is yet to be seen.
Loan balances for the previous quarter increased by only 2% overall, and consumer loans continued to soften for 2 consecutive quarters. Investors are keenly observing signs of a significant recovery in demand for loans, which is critical for bringing the decline in net interest income to a more moderate pace.
Steven Bigger of Argus Research points out that while rising interest rates have historically benefited banks' net interest margins, recent interest rate cuts may ease some of the pressure banks face, particularly with regard to deposit costs and loss allowances. There is a possibility that these three advantages will benefit lending operations if interest rate cuts continue to be realized.
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Non-interest income
Earnings from the non-interest rate sector will be mixed this fiscal season. Earnings from the investment banking sector areSince M&A (mergers and acquisitions of companies) continues to be sluggish, it is still suppressedIt's possible. However, there is a possibility that the wealth management and asset management sector will be positively affected since the S&P 500 stock price index increased 5.5% from the previous fiscal year, slightly exceeding growth in the previous fiscal year.
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Consumer credit
Consumer health continues to be the focus of investors, especially after Ally Financial's recent alert update and concerns about a potential consumption slowdown due to a decline in savings due to the pandemic
Bank of America analysts, Bank of America analysts led by Ebrahim H. PoonawalaMaintaining a cautious and optimistic stance on bank stocksIt shows the view that if soft landing is realized, customer activity will be revitalized, loan growth will increase, and there is a possibility that the stock price-earnings ratio (PER) ratio of the banking sector will eventually rise.
However,Macroeconomic uncertainties, including the possibility of policy changes in the Federal Reserve and the next US presidential electionpresents serious issues that may weaken this outlook.
As the US Federal Reserve (Fed) interest rate cut cycle continues, the Bank of America is paying attention to net interest margin (NIM) in preparation for financial results announcements. There is a possibility that anticipated interest rate cuts will put pressure on banks' net interest rate income (NII), and it has already been declining for 4 consecutive quarters. Relaxation in interest rates may eventually boost lending growth,The immediate impact will be severe on net interest incomeMaybe.
Since deposit costs are reset faster than loan interest rates, there is a possibility that some cushion will be given to net interest income for the time being. Furthermore, although lower interest rates may promote an increase in lending, no concrete evidence of a recovery in demand for loans is yet to be seen.
Loan balances for the previous quarter increased by only 2% overall, and consumer loans continued to soften for 2 consecutive quarters. Investors are keenly observing signs of a significant recovery in demand for loans, which is critical for bringing the decline in net interest income to a more moderate pace.
Steven Bigger of Argus Research points out that while rising interest rates have historically benefited banks' net interest margins, recent interest rate cuts may ease some of the pressure banks face, particularly with regard to deposit costs and loss allowances. There is a possibility that these three advantages will benefit lending operations if interest rate cuts continue to be realized.
Earnings from the non-interest rate sector will be mixed this fiscal season. Earnings from the investment banking sector areSince M&A (mergers and acquisitions of companies) continues to be sluggish, it is still suppressedIt's possible. However, there is a possibility that the wealth management and asset management sector will be positively affected since the S&P 500 stock price index increased 5.5% from the previous fiscal year, slightly exceeding growth in the previous fiscal year.
Consumer health continues to be the focus of investors, especially after Ally Financial's recent alert update and concerns about a potential consumption slowdown due to a decline in savings due to the pandemic
Michael Dixon, who is in charge of research at Horizon Investments, said, “It will be important to keep a close eye on bank announcements regarding credit arrears and loan quality, and what views companies specialized in retail have on private consumption trends. “GDP-related data shows strong trends in the region, but more timely and detailed views will attract attention,” he said.
Credit card defaults (default) remain at a normal level, but signs of financial stress have appeared among low-income people, and there is a possibility that it will affect overall private consumption. Financial results guidance for banks and retail-related companies will be extremely important in determining consumer trends for the holiday season and 2025.
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Buffett will reduce the amount of investment
One thing bank investors should pay attention to is led by Warren Buffett $Berkshire Hathaway-A (BRK.A.US)$ButBank of America's holdings were drastically reduced during the last month, approximately 0.2 billion 39 million shares (about 23% of shares held) were sold, and a profit of about 10 billion dollars was obtained from the saleThat's it.
Mr. Buffett did not publicly explain the basis for this decision, but possible reasons include determining profits after stock prices rose 50% in the past year, concerns about raising capital gains taxes, strategic rebalancing of Berkshire's 300 billion dollar stock portfolio, and pessimism about stock price movements. The current reduction in Bank of America shares continues even though other companies in the same industry, such as JPMorgan and Goldman Sachs, have made similar withdrawals in recent years.
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In addition to interest rate cuts, attention is also being paid to long-term regulatory policy changes
For the time being, Wall Street believes that the impact of interest rate cuts on bank earnings will be “mixed.” It is also necessary to pay attention to new management regulations in the banking industry.
According to Bloomberg, regulatorsDraft rules were agreed to implement a comprehensive review of major US banks facing capital increase requirements, and the amount was lowered to 9%, which is a drastic reduction compared to the original planIt's called.
Banks with assets of 100 billion dollars or more needed to increase their equity capital by about 16% based on the requirements of the new banking regulation measures announced by the Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of Currency Supervisory Authority (OCC) in July last year.
Eight globally important US banks, such as JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley, increased their equity capital by 19% in order to prepare for unexpected losses and financial shocks.
According to Bloomberg's report,Drastic cuts in equity regulations are likely to appease banksIt's called. After this plan was introduced in July last year, the banking industry developed the most intense lobbying activity in history. Additionally, this review of the new program may help Federal Reserve Chairman Powell achieve his goal of gaining broad support within the Federal Reserve. Chairman Powell has made it clear to banks that he wants to avoid protracted legal battles for a long time, and the final adoption may be “the end of next year.”
ー MooMoo News Evelyn
Source: Moomoo, Bloomberg, Fact Set, Market Chameleon
This article uses automatic translation for some of its parts
One thing bank investors should pay attention to is led by Warren Buffett $Berkshire Hathaway-A (BRK.A.US)$ButBank of America's holdings were drastically reduced during the last month, approximately 0.2 billion 39 million shares (about 23% of shares held) were sold, and a profit of about 10 billion dollars was obtained from the saleThat's it.
Mr. Buffett did not publicly explain the basis for this decision, but possible reasons include determining profits after stock prices rose 50% in the past year, concerns about raising capital gains taxes, strategic rebalancing of Berkshire's 300 billion dollar stock portfolio, and pessimism about stock price movements. The current reduction in Bank of America shares continues even though other companies in the same industry, such as JPMorgan and Goldman Sachs, have made similar withdrawals in recent years.
For the time being, Wall Street believes that the impact of interest rate cuts on bank earnings will be “mixed.” It is also necessary to pay attention to new management regulations in the banking industry.
According to Bloomberg, regulatorsDraft rules were agreed to implement a comprehensive review of major US banks facing capital increase requirements, and the amount was lowered to 9%, which is a drastic reduction compared to the original planIt's called.
Banks with assets of 100 billion dollars or more needed to increase their equity capital by about 16% based on the requirements of the new banking regulation measures announced by the Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of Currency Supervisory Authority (OCC) in July last year.
Eight globally important US banks, such as JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley, increased their equity capital by 19% in order to prepare for unexpected losses and financial shocks.
According to Bloomberg's report,Drastic cuts in equity regulations are likely to appease banksIt's called. After this plan was introduced in July last year, the banking industry developed the most intense lobbying activity in history. Additionally, this review of the new program may help Federal Reserve Chairman Powell achieve his goal of gaining broad support within the Federal Reserve. Chairman Powell has made it clear to banks that he wants to avoid protracted legal battles for a long time, and the final adoption may be “the end of next year.”
ー MooMoo News Evelyn
Source: Moomoo, Bloomberg, Fact Set, Market Chameleon
This article uses automatic translation for some of its parts
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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