Coffee With Greta: Traders Digest Big Bank Earnings
DJIA Futures: +64 (+0.2%)
SPX Futures: +6 (+0.2%)
NASDAQ Futures: +11 (+0.1%)
Good morning friends!
Futures are higher as traders digest Q3 earnings from 4 of the largest banks in the U.S.
Let’s get right to it!
Interest Income Boosts JPMorgan Chase Q3 Profits
JPMorgan Chase (JPM) shares are up 1.2% ahead of the open after topping Q3 expectations on the top and bottom line.
Here’s how the bank’s results compared to analysts’ expectations:
- EPS: $3.12 vs $2.88 expected
- Revenue: $33.49 billion vs $32.1 billion expected
Profit fell 17% year over year as the bank boosted its loan reserves by $808 million.
Revenue jumped 10% compared to a year ago as Chase benefited from higher interest rates.
Net interest income surged 34% to $17.6 billion, topping analysts’ expectations by more than $600 million.
Wells Fargo Beats Q3 Expectations
Wells Fargo (WFC) shares are up 1.8% in premarket trade after beating Q3 expectations.
Here’s how the bank’s results compared to analysts’ estimates:
- Adjusted EPS: $1.30 vs $1.09 expected
- Revenue: $19.51 billion vs $18.78 billion expected
Wells Fargo built up its credit loss reserves by $784 million last quarter, which dented profits.
Net income fell more than 30% from Q3 2021.
Wells Fargo’s mortgage business has been impacted by higher rates but the bank has also benefited from higher rates in retail and commercial banking.
Net interest income jumped 36% due to higher interest rates and higher loan balance.
Morgan Stanley’s Q3 Profit Plunges
Morgan Stanley (MS) shares are down 2.8% ahead of the open after missing Q3 expectations on the top and bottom line.
Here’s how the bank’s results compared to analysts’ expectations:
- EPS: $1.47 vs $1.49 estimate
- Revenue: $12.99 billion vs $13.3 billion estimate
Profit tumbled 29% year over year with revenue down 12%.
Morgan Stanley’s investment banking revenue tumbled 55% to $1.28 billion, in line with estimates.
But investment management revenue dropped 20% to $1.17 billion, below estimates.
Citigroup Beats Q3 Estimates
Citigroup (C) shares are up 0.8% in premarket trade after beating Q3 expectations even as profits plunged year over year.
Here’s how the bank’s results compared to analysts’ expectations:
- EPS: $1.63 vs $1.42 expected
- Revenue: $18.51 billion vs $18.25 billion expected
Revenue rose 6% year over year while net income plunged 25% as the bank built up its loan loss reserves.
Citigroup increased those reserves by $370 million during the quarter.
September Retail Sales Fall Flat
Retail sales fell flat in September as high inflation puts pressure on consumers.
The Commerce Department reported retail sales were unchanged last month vs expectations for 0.3% growth.
That was down from the upwardly revised 0.4% growth in August.
Retail sales were up 8.2% year over year, a five-month low.
Sales at motor vehicles and parts dealers fell 0.4% while gasoline sales dropped 1.4%.
Restaurants and bars saw a 0.5% increase in sales and grocery store sales rose 0.4%.
Retail sales excluding autos rose 0.1% vs economists’ expectations for 0%.
Kroger to Buy Albertsons
Kroger (KR) shares are falling 2.7% ahead of the open after announcing it will buy Albertsons (ACI).
ACI shares are also down 3.7% in premarket trade.
Kroger will buy Albertsons for $34.10 per share, in a deal valued at $24.6 billion.
The combination of the two grocers would put the company in a close second to Walmart (WMT) as the largest U.S. grocer by market share.
Both companies’ boards have unanimously approved the agreement which now needs regulatory approval.
Oil Prices Fall On Recession Worries
Oil prices are slipping today as recession fears take over.
West Texas Intermediate crude futures are down 2% to just over $87 bbl while Brent crude futures are down 1.8% to just under $93 bbl.
Both contracts are on track for weekly losses following two straight weeks of gains.
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