Speaker 1: Bloomberg Audio Studios, podcasts, radio News, The.
Speaker 2: Stock Movers Report, your roundup of companies making moves in
Speaker 2: the stock market, harnessing the power of Bloomberg Data.
Speaker 3: Let's take a look now add some stocks making news
Speaker 3: in the week ahead. I'm Nathan Hager, joined by Bloomberg
Speaker 3: Intelligence senior US Banks analyst Herman Chan, and it is
Speaker 3: all about the banks this week, with three heavyweights kicking
Speaker 3: off earning season on Tuesday, JP Morgan, Chase Wells Fargo
Speaker 3: and City Group. Herman, let's start with the big guy.
Speaker 3: What are you watching for from Jamie Diamond in company?
Speaker 1: Yeah, it's going to be a great and interesting quarter
Speaker 1: for Jamie Diamond, JP Morgan and the rest of the banks.
Speaker 1: We're an interesting setup heading into earnings with heightened Jipoo concerns, stackflation, potential,
Speaker 1: private credit worries. That's all been weighing on the group.
Speaker 1: On the other hand, one cre is looking to be
Speaker 1: pretty solid, with JP Morgan expecting fifteen percent growth in
Speaker 1: trading revenues and also investment banking could be up that
Speaker 1: same level as well. We're also seeing a pickup in
Speaker 1: commercial lending activity, which is helpful across the group, and
Speaker 1: some margin stability and really good performance across the credit
Speaker 1: quality as well, so macro concerns, but the underlying fundamentals
Speaker 1: still look really strong.
Speaker 3: What has you thinking those underlying fundamentals still look strong
Speaker 3: given you know so much of the concern we have
Speaker 3: in the market right now around all the uncertainties and
Speaker 3: the economic impact from the war Iran.
Speaker 1: That's right. I would characterize the economy right now as
Speaker 1: really resilient. So we're seeing that resiliency flow through into
Speaker 1: the bank's earnings and profitability. On the other hand, really
Speaker 1: what we're focused on going forward is what's going to
Speaker 1: happen next and guidance will be key for across the
Speaker 1: banks that we cover. Are we seeing any sort of
Speaker 1: cracks and credit due to higher energy costs that consumers
Speaker 1: are facing today. Are we seeing any cracks and credit
Speaker 1: on the commercial side as well? And is the market
Speaker 1: volatility affecting some of the backlogs for areas like investment
Speaker 1: making and ipo? So those are questions that the bank
Speaker 1: man teams will need to answer on the first quarter
Speaker 1: earnings calls.
Speaker 3: And when it comes to Wells Fargo Herman, how are
Speaker 3: they doing now that they're not under that asset cap
Speaker 3: restriction anymore.
Speaker 2: That's right.
Speaker 1: So that's going to be one of the growth stories
Speaker 1: for the banking group. And in the first quarter reporting
Speaker 1: where another quarter outside of the asset cat we're going
Speaker 1: to see some strong balance sheet growth for Wells Fargo,
Speaker 1: continuation of what they were reporting in the fourth quarter.
Speaker 1: That's really going to be reflected in areas like trading
Speaker 1: assets within the bank and also in areas like lending
Speaker 1: in the markets business lending to these non bank financial
Speaker 1: institutions that I alluded to earlier. So it's one other
Speaker 1: thing that we're looking for is maybe a rebound in
Speaker 1: the capital markets results relative to its peers. I would
Speaker 1: mention in the fourth quarter they lagged a little bit,
Speaker 1: so hoping for a rebound there in the first quarter.
Speaker 3: And when it comes to a city group, we had
Speaker 3: some recent reporting from Bloomberg News that they might be
Speaker 3: thinking about buying a regional bank to grow their business further.
Speaker 3: How real is that? Do you expect that to come
Speaker 3: up in the call?
Speaker 2: I do?
Speaker 1: I think analysts will probe on that. I think in
Speaker 1: the near term probably Jane Frasier, their CEO, pauses that potential.
Speaker 1: In the near term, I think that's really reflected due
Speaker 1: to the fact that their evaluation is relatively weaker than peers.
Speaker 1: They're going to need to improve in order to make
Speaker 1: an M and A deal work financially. That being said,
Speaker 1: they have a investor day coming up in May, so
Speaker 1: we'll hear more about that in the first quarter reporting,
Speaker 1: and we think first quarter results really lays the groundwork
Speaker 1: for some positive news heading into the investor Day.
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