US banks' earnings – What to watch
US major banks kick off earnings season. JP Morgan, Wells Fargo, and Citigroup report on Tuesday, 15th, followed by Goldman Sachs & Morgan Stanley on Wednesday, 16th.
The earnings come after a solid quarter in terms of share price, with the major banks rising to record highs across the quarter. U.S. banks delivered strong Q1 2025 earnings, beating forecasts, with trading desks driving standout performance amid volatile markets. Investment banking and lending delivered solid numbers.
Across Q2, banks have faced increased headwinds from macroeconomic uncertainty owing to Trump’s trade tariff turmoil and changing Fed rate cut expectations.
While volatile market conditions could mean another strong performance on the trading desks, the earnings outlook is subdued, and the growth is likely hindered by weaker demand in the investment banking and conventional banking businesses.
Despite the anaemic earnings outlook, the share prices have soared across the quarter, which is more to do with these banks comfortably passing the Federal Reserve’s stress test, opening the way for increased capital returns to shareholders through share buybacks and dividend hikes.
JP Morgan Q2 earnings preview
JP Morgan earnings come as the share prices rally 22% year to date, boosted by student loan demand, rising interest income, and broad strength across its consumer banking and credit card units. However, rising expenses and growing headwinds mean sentiment is only cautiously optimistic regarding Q2 earnings. Expectations of four EPS of $4.48, marking a 26% decline year over year, whilst revenues are expected to fall 42% from a year ago to 75.94 billion. JPMorgan lifted its quarterly dividend to $1.50 per share from $1.40 earlier this month and authorised a $50 billion share buyback programme.
JP Morgan has a consensus moderate buy rating among 22 Wall Street analysts, 16 buy, 4 hold, and two sell recommendations. The average target price is 293, implying 1.8% upside.
How to trade JPM earnings?
JP Morgan's share price recovered from the 201 low, rising above the 200 SMA to reach a record high of 296. The price has eased back from the record level, pulling the RSI out of overbought territory. Support can be seen at 280, the 200 SMA, and 276, the February high. A break below here and 269 could negate the near-term uptrend. Meanwhile, buyers need a rise above 296 to create a higher high and extend the bullish run.
Goldman Sachs Q2 earnings preview
Goldman Sachs is due to release Q2 earnings ahead of the market open on Wednesday, July 16th.
Forecast for investment bank to post the 12% increase in EPS to $9.73, whilst revenue is expected to come in slightly softer compared to the same quarter a year ago at $13.48 billion.
The results came after the share price rose following the Q1 results on April 14th. The company posted net revenue of $ 15.1 billion, up 6% year over year. The revenue growth was driven by higher revenues in the global banking and markets segment, which offset a slight decline in asset and wealth management revenues. The market will be watching to see whether this trend continues, particularly in light of the volatile market conditions. Guidance will be notably in focus, with the market watching the outlook for investment banking, given the uncertain backdrop caused by Trump.
The consensus view on Goldman Sachs remains moderately optimistic, with a buy rating, 23 analysts covering the stock show nine pointing to strong buys, one moderate, and 13 hold.
How to trade GS earnings?
Goldman Sachs ’ share price has recovered from the 437 April low, rising to a record high of 726. The price has eased back modestly and continues to trade above the multi-month rising trendline. The RSI has eased out of overbought territory.
Buyers will look to rise above 725 to fresh record highs.
Support can be seen at 665, the February high, and below here, 617, the May high comes into view.
Netflix Q2 earnings preview
Netflix has continued to prove itself as the world's number one streaming network, beating off competition from deep-pocketed rivals. The share price is trading around record highs after an impressive Q1 update. Headline numbers all came in ahead of expectations with net income surging to $2.89 billion ahead of the $2.44 billion forecast, whilst the operating margin jumped to 31.7% well above the 28.4% forecast. Q1 revenue was $10.5 billion with Q2 forecasts upgraded to $11 billion whilst net income for this quarter is expected to rise to $3.05 billion with an operating margin of 33.3%. Netflix is showing solid overall growth across all regions; however, the US region has seen the weakest growth in calendar terms due to FX adjustments.
How to trade NFLX earnings?
The Netflix share price recovered from the 820 April low, rising to a record high of 1340 across the quarter. The price has eased back from the ATH, dropping below the 20 SMA and falling out of the rising channel to a low of 1245 at the time of writing. The RSI has dropped below 50.
Sellers will look to extend the decline below the 50 SMA at 1215 towards 1066, the February high.
Buyers would need to rise above 1300 to bring 1340 and fresh record highs into focus.
