WSH in the News

Traders' Insight: A Disappointing Start to Earnings Season Sends Markets into Tailspin

Read the full article on Traders' Insight.


Banks Kick Off Q4 Reporting Season on the Wrong Foot

In 2021 all of us that watch quarterly earnings became accustomed to big beats from a majority of S&P 500 companies, especially the banks as they start each earnings season and had easier comparisons to 2020. That has changed this earnings season. Q4 kicked off with a whimper. In a stunning reversal from the last few years, Wells Fargo was the only big bank that beat on both the top and bottom-line and saw a pop in share prices, as the consumer bank benefitted from a pick up in consumer spending, higher fees, and increased lending in the second half of the year. 

JPMorgan and Citigroup had a different fate however. JPMorgan beat on EPS (actual: $3.33 vs. estimate: $3.01*) but missed on the top-line (actual $29.25B vs. est: $29.78B*). Headwinds included higher expenses and a tightening labor market. Citigroup on the other hand surpassed revenue expectations (actual: $17.01B vs. est: $16.85B*) but missed bottom-line estimates (actual: $1.46 vs. est: $1.72*), also due to increased expenses and a decrease in revenues for their global consumer banking business. *All estimates provided by FactSet

We are still waiting on results from the remaining three big banks this week: Bank of America and Goldman Sachs on Tuesday, and Morgan Stanley on Wednesday.