Earnings season: banks set to release Q4 reports

In an environment normally suited to loose monetary policy, how will the Fed react this year amid persistent inflation – and how will banks be affected? Consider taking a position on banking heavyweights like JPMorgan, Citigroup and Bank of America.

  • Will Fed hikes ease this year as recessionary pressures mount?
  • Fed must balance inflation control with prospect of stalling economy
  • Go long or short on the banking giants
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How will Q4 bank earnings match up with the last quarter?

Q4 bank earnings is here, and all eyes are on the performance of U.S. heavyweights such as Wells Fargo, JP Morgan and Morgan Stanley.

The Federal Reserve’s hawkish policy in 2022 meant five interest rate hikes in response to ballooning inflation – but will the pace of hikes slow as recessionary conditions escalate?

While in theory higher rates can mean greater margins for banks by way of higher interest income, it may also mean fewer mortgage originations and refinancings. Conversely, if the Fed puts a hold on further hikes, or switches to dovish policy, the economy may receive a boost as access to cheaper loans can potentially bolster consumer spending.

Bank stocks have largely fallen throughout Q3, but mostly saw an uptick in Q4. Reports for the banking sector could be a useful barometer for the wider economic landscape.

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How do I trade earnings season?

To trade bank earnings, you can decide whether you think a bank’s share price is going to move up or down when it releases its quarterly report – and open a position accordingly. Open a FOREX.com account to get started, or try a demo to trade risk-free.

Can I short bank stocks?

If you think a bank is going to miss estimates and fall in value, instead of hitting or exceeding estimates and rising in value, you can short it by selling its stock instead of buying it. With your FOREX.com account, you can select ‘sell’ instead of ‘buy’ in the platform.

Key Dates

  Company   Date
  J.P Morgan Chase (JPM)
  Jan 13, 2023
  Citigroup ( C )
  Jan 13, 2023
  Wells Fargo (WFC)   Jan 13, 2023
  Bank of America (BAC)   Jan 13, 2023
  Morgan Stanley (MS)
  Jan 17, 2023

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