Big Banks Kick Off Q3 Earnings Season as Regional Lenders Face Larger Price Swings
Major U.S. financial institutions are kicking off third-quarter earnings season. Leading banks including JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS), Citigroup Inc. (C), and Wells Fargo & Co. (WFC) report results on October 13, followed by Bank of America Corp. (BAC) and Morgan Stanley (MS) on October 14.
Options traders expect modest share price movements between 3.65% and 5.00% for the six largest Wall Street lenders. In contrast, smaller regional institutions face steeper anticipated swings. Six of the week's ten largest expected stock price moves belong to regional banks, with five companies overall priced for double-digit shifts.
The quarterly results come during a shifting monetary landscape after the Federal Reserve raised its policy interest rate to a 3.75% to 4.00% range in September, while the 10-year Treasury yield trades near 5.3%. Market participants will monitor how elevated interest rates affect net interest margins, loan growth, deposit costs, and asset quality.
Key points
- Major banks including JPMorgan Chase & Co. (JPM), Citigroup Inc. (C), and Goldman Sachs Group Inc. (GS) begin reporting third-quarter earnings on October 13.
- Options markets project limited price moves from 3.65% to 5.00% for the six largest U.S. bank stocks following their earnings releases.
- Regional banks dominate the week's highest anticipated volatility list, with Home BancShares Inc. (HOMB) carrying the largest expected move at 15.08%.
- The Federal Reserve raised its policy rate to 3.75%-4.00% on September 16, while 10-year Treasury yields trade near 5.3%.
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How we writeDisclaimerQuestions and answers
When do major U.S. banks report Q3 earnings?
JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo report October 13 before the market opens. Bank of America and Morgan Stanley report on October 14.
Which bank stock has the highest expected volatility this week?
Home BancShares Inc. carries the highest expected move among qualifying U.S. stocks at 15.08%, followed by ManpowerGroup at 14.07% and Simmons First National at 11.39%.
What interest rate factors are affecting bank earnings?
The Federal Reserve raised rates to a 3.75%-4.00% range in September, and 10-year Treasury yields sit near 5.3%. Higher rates raise lending revenue but increase deposit costs and lower existing bond values.