Four big U.S. banks have reported fourth-quarter earnings so far and there are a few themes emerging that may have implications for the Canadian banks.
The first is that last year's trading boom may be waning, with weakness in fixed income especially. https://www.bloomberg.com/news/articles/2021-01-15/citi-s-loan-optimism-fuels-profit-as-bond-traders-miss-estimates?sref=xam943XH
The first is that last year's trading boom may be waning, with weakness in fixed income especially. https://www.bloomberg.com/news/articles/2021-01-15/citi-s-loan-optimism-fuels-profit-as-bond-traders-miss-estimates?sref=xam943XH
BofA's sales and trading revenue missed estimates too, hurt by a slump in fixed income.
Even Goldman, which reported today, posted fixed-income trading results that fell short of estimates. https://www.bloomberg.com/news/articles/2021-01-19/bofa-joins-its-rivals-in-cutting-reserve-on-signs-of-a-recovery?srnd=premium-canada&sref=xam943XH
Even Goldman, which reported today, posted fixed-income trading results that fell short of estimates. https://www.bloomberg.com/news/articles/2021-01-19/bofa-joins-its-rivals-in-cutting-reserve-on-signs-of-a-recovery?srnd=premium-canada&sref=xam943XH
Another theme is that loan losses haven't been as bad as feared so the U.S. banks have cut their reserves. Canada's banks said at a conference last week that they're seeing similar trends but sounded a more cautious note on when they'll release reserves. https://www.bloomberg.com/news/articles/2021-01-15/big-banks-unleash-5-billion-from-reserves-on-optimism-for-loans?sref=xam943XH
Actually, we're five reports deep now since JPM was last week too.
JPM had a record quarter and a good quote about U.S. stimulus efforts. CFO Jennifer Piepszak: "The bridge has been strong enough - the question that remains is, is the bridge long enough." https://www.bloomberg.com/news/articles/2021-01-15/jpmorgan-s-wall-street-strength-spawns-a-record-quarterly-profit?sref=xam943XH
JPM had a record quarter and a good quote about U.S. stimulus efforts. CFO Jennifer Piepszak: "The bridge has been strong enough - the question that remains is, is the bridge long enough." https://www.bloomberg.com/news/articles/2021-01-15/jpmorgan-s-wall-street-strength-spawns-a-record-quarterly-profit?sref=xam943XH
For Wells Fargo, most of the issues are pretty particular to that firm. It's still trying to cut costs, sell off units and remediate the issues it had with customers years ago. https://www.bloomberg.com/news/articles/2021-01-15/wells-fargo-s-1-1-billion-in-charges-slows-cost-cutting-pace?sref=xam943XH