Wall Street’s big banks deliver mixed earnings. Executives bet the IPO lull won’t last
Bank of America reported a profit drop, Morgan Stanley and Citigroup beat estimates, Wells Fargo missed revenue targets, JPMorgan missed earnings for the first time in nearly three years, and Goldman Sachs exceeded expectations. Executives from JPMorgan and Goldman Sachs suggest IPO delays are temporary, with a strong pipeline of deals. Renaissance Capital expects 2023 to surpass last year's IPO count in deals, though not in proceeds.
How this was made
The 30-second read
Why it matters
Earnings outcomes create divergent short‑term price pressures across the banking sector.
Market read
Bank earnings drive sector sentiment; mixed results suggest uneven performance expectations.
What to watch
Rising expense pressures and fixed‑income market weakness could linger beyond the quarter.
Background
The article provides a quick roundup of Q3 earnings for six major U.S. banks, highlighting beats and misses.
Ticker impact
Bank of America reported a Q3 profit drop, indicating weaker earnings momentum.
likely pressure as the market prices in the profit decline
Earnings miss suggests lower near‑term profitability.
Morgan Stanley beat both top and bottom lines, showing stronger performance.
potential upside as investors reward the beat
Earnings beat may lift the stock in the short term.
Citigroup also posted earnings beat, matching expectations.
limited move as the beat was anticipated
Results were expected, so market reaction may be muted.
Wells Fargo missed revenue expectations, reporting $21.87 bn versus $22.31 bn consensus.
likely pressure as investors digest the revenue miss
Revenue miss signals weaker demand and may hurt the stock.
JPMorgan missed revenue and earnings for the first time in nearly three years, driven by higher expenses and weaker fixed‑income trading.
likely pressure as the market reacts to the first miss in years
First miss in years suggests a material shift in performance.
Goldman Sachs crushed estimates for both revenue and earnings per share, helped by a 72% surge in equities revenue.
potential upside as investors reward the robust results
Beat and large equities revenue growth could boost the stock.
Market effects
Bank earnings variance may influence broader financial sector sentiment and risk appetite.
U.S. market may see sector rotation between banks based on individual results.
Mixed bank performance could affect global credit markets and capital‑raising activity.
Counterpoint
Despite earnings misses, banks may benefit from a potential rebound in IPO activity later in the year.
Key entities
- authorMorgan Chittum
Fortune senior finance reporter
