Bank earnings return: how far will the Fed go?
After a hawkish 2022, will the pace of rate hikes slow this year – and how will banks be affected? Take a position on JPMorgan, Goldman Sachs, Bank of America and more at a critical time for policy.
- Will Fed hikes ease this year as recessionary pressures mount?
- Fed must balance inflation control with a stalling economy
- Will rate increases boost banks’ bottom lines – or reduce demand for loans?
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How will Q4 bank earnings match up with the last quarter?
Q4 bank earnings season is here, and all eyes are on the performance of U.S. heavyweights such as Wells Fargo, JPMorgan and Morgan Stanley.
The Federal Reserve’s hawkish policy in 2022 meant a series of 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 refinancing. 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 largely fell throughout Q3, but mostly saw an uptick in Q4. Reports for the banking sector could be a useful barometer for the wider economic landscape.
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, 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.
Q4 earnings season
Q4 earnings season kicks off in earnest mid-January, with Bank of America, Citigroup, JPMorgan Chase & Co, and Wells Fargo releasing their reports on January 13th, and Morgan Stanley on January 17th.
Earnings release dates
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