JPMorgan, Wells Fargo, Morgan Stanley, Wells Fargo, Bank of America, Citigroup!
Quarter three 2022 earnings reports entered its new phase with the banks' reports. Major banks in the US published their earnings reports on Friday 14, and the rest On Monday, October 17. Looking at the stock's price performance, we can see that despite big increases in interest revenue, they are mixed and not as expected. Let's first review the results:
As you can see above, all of them could beat the expectations, because, for different reasons, such a rate rise by the central bank, can increase the banks' income in the short term. However, in long term, high inflation, Fed rate increases, and lower consumer demand can weaken the Loan volume, because it will be more costly and difficult to obtain.
Overall, as you can see in comparing chart, the market reaction was not as good as the results. Investors expect a recession or at least lower economic growth. While we will have higher costs for loans and less business that they can request credit, banks also will be under pressure as other stocks. Outlooks are not so bright for other stocks and businesses as well, so we can confirm a weaker outlook for financial sectors and especially for issuers of commercial loans because the percentage of bad loans also will increase.
