Q1 Earnings preview - Banking Sector | IFCM UK
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More hopes on positive reports

J P Morgan Chase & Co is preparing to report its Q1 earning reports of 2021 on April 14, before the market opens. The information will be for the quarter first ending March 2021. Based on Zacks Investment research and nine analysts, EPS expectation for this quarter is $3.05. In the same quarter last year, EPS has been reported at $0.78. Revenues share is also expecting to increase by 5% to $30.10 billion.

Wells Fargo & Company also will be reporting before the market opens just one hour after JP Morran. According to Zacks Investment Research, based on 11 analysts' forecasts, the consensus EPS forecast for the quarter is $0.69 and revenues of $17.41 billion. The reported EPS for the same quarter last year was $0.01. (Zacks)

What helped to better the recovery of banks?


  • Due to lower interest rates, the banking sector was a bit under pressure in the second quarter of 2020; however, after that, the US government stimulate packages started from the second quarter of 2020 by latest $2.25 Trillion Infrastructure Bill of President Biden, we are expecting that financial sector to get benefit from that.
  • On the other hand, recovery in bond yields is likely to support higher banking revenue over the past months.
  • The latest new loan numbers in the US also show an increase in Personal and business loans, which is another income way for the banking sector. About the loans, JPM announced that they released $2.9 billion from loan-loss-reserves in the quarter 4 2020, suggesting improvement in the perceived loan default risk. Exact expectations we have for Q1 2021 as well.
  • Economic recovery and a rise in consumer spending will help the banks, as clients are willing to use their credit and debit cards more than before.
  • And finally, banks and financial companies were some of the most prominent asset market players. Trading in Stock markets was one of the main factors which helped the faster recovery of banks from pandemic crises. For example, Goldman Saches reached a 10-year high in the previous quarter.

JP Morgan


Technically in the H1 chart, it is in the downtrend. RSI at 44, price under both 20 and 50 HMA, as well as OBV trend line. The pivot point at 156.30 is the key level to support the downtrend. The upbeat report, in the beginning, must send the price above PP to put the 2021 high at 161.75 in radars. The negative report, will hold the current downtrend and 152 as a target.

Wells Fargo


Precisely the same as JP Morgan. WFS is also moving under Trend line, main MA lines, and RSI at 41. For WFS, the pivot point at 40.70 supports a downtrend, and yesterday's close of 39.80 is under S3. A negative earnings report will keep the price under pressure; however, the positive report, which is expected, will open the doors for higher prices. R1, R2, and R3 respectively sitting at 41.00, 41.20, and 41.50.

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Publish date
21/12/23

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