The recent quarterly earnings reports for banks have been a nightmare for their stocks. JPM fell 2.6% since end of day Thursday, and BAC fell 1.5 % from its close yesterday. But the bank that got it the worst was GS, which dropped 2.5% since closing at $229.26.
Although the banks are getting beat down by the market, they haven’t been doing all that horrible in the quarterly.
Bank of America
EPS: 46 cents vs expected 43 cents
Revenue: $22.829 billion vs expected $21.781 billion
Fixed income trading: $2.254 billion vs expected $2.22 billion
Goldman Sachs
EPS: $3.95 vs expected $3.72
Revenue: $7.89 billion vs $7.57 billion
Fixed Income trading Revenue: Went from $2.67 billion to $1.6 billion in one year
Although these banks beat the Wall Street expectations with their EPS and Revenue, the main focus of investors is the decreases in Fixed income trading. Especially in GS having a 40 percent decrease compared to last year. Bank of America also did not meet fixed income trading expectations, but Goldman took the bigger hit being the bank that is most reliant on trading revenue. GS is beginning to lean towards consumer banking like their friends at Bank of America.
Also, rumors that Trump will not pull through on his banking deregulation or it will take longer than expected also left investors scared.
Is this a golden opportunity to invest in these big banks during this slight downfall? Or is it unsafe with Trump running around and leaving his banking friends hanging?
Is this just a slight hiccup for the big banks, after all their performance wasn’t completely horrible, or is Goldman a complete mudslide if they don’t change up the game plan?
