JPMorgan and Citigroup shares fall after earnings release

  • JPMorgan shares fell after the bank’s chief financial officer, Jeremy Barnum, spoke of “headwinds” in high spending.

  • Shares of Citigroup also fell, with the bank announcing the sale for $2.7 billion of its retail banking operations in Vietnam, Singapore, Thailand and Malaysia.

  • Wells Fargo stock rose in early trade, with the rise coming on the back of broader stock market weakness on Friday.

JPMorgan (JPM), Wells Fargo (WFC) and Citigroup (C) marked bank earnings week on Friday, with the three major financial services and investment banks posting better-than-expected earnings.

Bank profits came out as stock markets experienced a deeper slowdown after hot U.S. inflation data and investor jitters over impending Fed interest rate hikes.

European markets were heading for a lower close after Asian stocks broke with Japan’s Nikkei, Korea’s Kospi and China’s Shanghai.

In the US, Wall Street also saw increased downward pressure as all major indexes struggled amid gains for the dollar and bond yields.

JPMorgan stock holds 5% after earnings

JPM shares were down 5% at 160.00 in first trades on Friday, despite earnings reports showing quarterly earnings per share of $3.33, beating analyst estimates of $2.98.

However, earnings per share were lower than the $3.79 per share reported in the same quarter a year ago. The bank’s revenue was $29.26 billion, compared to $29.34 billion for the same quarter in 2020.

Following declines seen on Friday, JPM stock has now plunged 1.02% in YTD returns. This is an increase of about 13% over last year.

Citigroup shares fall 3%

Citigroup shares fell nearly 3% to 65.08 in early trades, with the decline also coming after the bank released its quarterly results.

The fourth quarter earnings report showed earnings of $1.46 per share, 28% lower than fourth quarter 2020 results but above analyst estimates of $1.38. Profits, however, were cut by $0.53 after the sale of consumer businesses in four Asian countries.

Revenue in the quarter rose 1.12% to $17.02 billion, beating analyst estimates of $16.77 billion. However, Citigroup’s net profit fell 26% to $3.2 billion as operating expenses jumped 18% year-on-year to $13.5 billion.

Wells Fargo shares jump 4.5%

Wells Fargo also released its fourth quarter results on Friday. The company reported GAAP earnings of $1.38 per share, representing an impressive 109% growth from the $0.66 per share reported in the fourth quarter of 2020.

The company’s stock was up more than 3% pre-market and traded as high as $58.87. WFC stock rose 4.5% in mid-morning trading, with cumulative gains of more than 15%.

Earnings next week

Earnings season continues with a slew of companies reporting results over the weekend as stock markets appear to be stabilizing after being buffeted by inflation and potentially faster interest rate hikes than expected by the US central bank.

Among the highlights, Bank of America and Morgan Stanley report their fourth quarter 2021 results on Tuesday and Wednesday, respectively.

Other important stocks to watch ahead of earnings reports include Netflix, UnitedHealth Inc. and Costco Wholesale Corp.

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