JPMorgan stock tanked after the bank's chief financial officer Jeremy Barnum talked of “headwinds” in high expenses.
Citigroup’s shares also fell, with the bank announcing a $2.7 billion sale of its consumer banking operations in Vietnam, Singapore, Thailand, and Malaysia.
The Wells Fargo stock climbed in early trades, with the upside coming on the back of broader weakness in the stock market on Friday.
JPMorgan (JPM), Wells Fargo (WFC), and Citigroup (C) on Friday highlighted the earnings week for banks, with all three major financial services and investment banks posting better than expected earnings.
The banks’ earnings came out as equity markets saw a broader slowdown after hot US inflation data and investor jitters on imminent Fed interest rate hikes.
European markets were headed for a lower close after Asian shares ended with Japan’s Nikkei, Korea’s Kospi and China’s Shanghai down.
In the US, Wall Street was also seeing increased downside pressure as all the major indexes struggled amid gains for the dollar and bond yields.
JPMorgan shares tank 5% after earnings
JPM shares were down 5% to 160.00 in early trades on Friday despite the earnings reports showing quarterly earnings per share of $3.33 that beat analyst estimates of $2.98.
However, the per-share earnings were lower than the $3.79 per share reported in the same quarter a year ago. The bank’s revenue came in at $29.26 billion compared to $29.34 billion reported for the same quarter in 2020.
After the declines seen on Friday, the JPM stock has now dipped 1.02% in YTD returns. It’s about 13% up over the past year.
Citigroup shares dip 3%
Citigroup shares dipped nearly 3% to 65.08 in early trades, with the decline also coming after the bank released its quarterly earnings results.
The Q4 earnings report showed earnings coming in at $1.46 per share, which was 28% down on Q4 2020 results but higher than analyst estimates of $1.38. The earnings were however clipped $0.53 after the sale of consumer operations in four Asian countries.
Revenue over the quarter rose 1.12% to $17.02 billion, beating analyst estimates of $16.77 billion. However, Citigroup’s net income fell 26% to $3.2 billion, with operating expenses jumping 18% year-over-year to $13.5 billion.
Wells Fargo stock jumps 4.5%
Wells Fargo also released its Q4 earnings results on Friday. The company reported GAAP earnings of $1.38 per share, representing an impressive 109% growth over the $0.66 per share reported in Q4 2020.
The firm’s stock saw a premarket upside of over 3% and traded as high as $58.87. The WFC stock was up 4.5% in mid-morning trades, with year-to-date gains of more than 15%.
Earnings next week
The earnings season continues with a host of companies releasing their results over the weekend, as stock markets look to steady after being rattled by inflation and potentially quicker-than-expected interest rate hikes by the US central bank.
Among key highlights, Bank of America and Morgan Stanley release their Q4 2021 earnings on Tuesday and Wednesday respectively.
Other major stocks to watch ahead of the earnings reports include Netflix, UnitedHealth Inc., and Costco Wholesale Corp.