The banks are in focus this week as they will report earnings with JPMorgan Chase coming out with their report Tuesday morning before the open. JPMorgan has outperformed its peers and their growth has been 18% per year last three years.
Last two years, JPMorgan Chase has beaten Earnings Per Share estimates 100% of the time. They have also beaten revenue estimates 100% of the time.
Analysts expect JPMorgan to earn $2,50 per share in the second quarter on revenue of $28,91 billion. JPMorgan earned $2,22 in the second quarter last year.
JPMorgan is different from Well Fargo which is also reporting earnings on Tuesday. JPMorgan Chase has moved up over 10% over the past year while Wells Fargo has faced a lot of obstacles, inkluding lack of their own CEO.
The banking industry is scary to me at the moment, and the most dangerous bank in the world is in Europe. Dutche Bank has been a desaster for a long time and the company are on the edge. A collapse could send the whole world in a negative trend.
We are also entering a rate-cutting cycle which is not good for the banks either. The margins will shrink and the earnings will decline while the rates are falling and the spread between the rates on loans and the rates paid out on deposits shrinks.
Morgan Stanley and Citi both downgraded the industry as a whole because of this development with rates, but JPMorgan is still a favorite.