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JPM Earnings Due
US earnings season heats up today with JP Morgan, the biggest US bank by assets, due to report Q1 earnings. The bank’s earnings are always seen as a bellwether for the broader financial sector and on the back of recent banking stress in the US, today’s results will be closely watched. In terms of headline figures, Wall Street is looking for EPS of $3.41 on revenues of $36.125 billion. This would mark a slight uptick in revenues though a mild drop in earnings.
Deposit Levels on Watch
However, in light of the recent banking sector turmoil we’ve seen, traders will be paying close attention to the bank’s deposit level. Megabanks such as JPM are expected to have seen an influx of deposits in the wake of SVB and Signature Bank failing as savers sought the safety of bigger banks. The forecast is for deposits of $2.31 trillion.
Recession Risks in Focus
However, traders will be keen to see if there has been any increase in provisions for bad loans. Banks typically build up their credit buffers in anticipation of any forthcoming weakness in the economy. With US recession risks returning to focus, any uptick in provisions for credit losses (forecast $2.27 billion) might well take a toll on risk appetite as traders interpret this as an indication that a forthcoming recession is likely.
Finally, the market will be paying close attention to CEO Jamie Dimon’s outlook for the current year. Downside risks and recession risks in particular will be in close focus while traders will also be listening for Dimon’s insight into the health of the banking sector and whether those troubles have passed now or might return again this year.
Technical Views
JP Morgan
The failure at the 142.12 level has seen JMP shares turning lower within the broad bull channel which has framed the recovery higher off last year’s lows. Price is currently stalled around the retest of the 128.58 level and the bull channel lows. While this area holds, the broader focus is on a recovery and return to higher levels with an eventual breakout above the 142.12 level targeting 152.15 next. However, should price break below the bull channel, 116.02 becomes the next support to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.