Wells Fargo (NYSE:
) kicked off financial earnings Friday, and it's super busy in
the sector this week with earnings due from Goldman Sachs (NYSE:
), J.P. Morgan Chase & Company (NYSE:
), Bank of America (NYSE:
) and Citigroup (NYSE:
Fourth-quarter numbers from Wells Fargo looked pretty good on
the surface, but Wall Street focused on the banks' net interest
margin -- basically the difference between the interest rate
received on interest-earnings assets (loans) and the interest
rate paid on interest-earning liabilities (customer deposits). It
came in at 3.56 percent versus 3.89 percent a year ago and 3.66
percent in the third quarter. Earnings and sales growth came in
better than expected with quarterly profit up 25 percent from a
year ago to $0.91 a share. Sales rose six percent to $21.9
Technically, Wells Fargo still looks solid. It's been toying
with a breakout over $35.19 -- its December 18 intraday high --
but hasn't really gotten going yet. On Friday, the stock enjoyed
a nice bounce off its 20-day simple moving average (
) after early weakness. It finished near its high for the session
as big buyers came in late.
Here are some quick thoughts on other financials set to report
Goldman Sachs: Earnings due Wednesday before the open (EPS
estimate +101 percent to $3.70 a share; sales +31 percent to $7.9
billion). In the third quarter, investment banking revenue rose
49 percent from a year ago. Revenue from stock trading fell 16
percent from while its bond trading division increased revenue by
28 percent. Technical take: Stock is extended (too late buy)
after recent breakout over $129.72. Wait for pullback. $129 looks
like solid support level.
J.P. Morgan Chase & Company: Earnings due Wednesday before
the open (EPS estimate +30 percent to $1.17 a share; sales +10
percent to $24.4 billion). In the third quarter, net interest
margin fell to 2.43 percent from 2.66 percent a year earlier, but
the company's mortgage lending business showed signs of life. New
home loans and refinancings totaled $47 billion in the third
quarter, up 29 percent from the third quarter of 2011. Technical
take: Recent breakout over $44.54; not quite extended yet but
wedging higher in light volume in recent days. Wait for pullback
-- expecting $44 to be solid support level.
Bank of America: Earnings due Thursday before the open (EPS
estimate -87 percent to $0.02 a share; sales -16 percent to $21
billion). In the third quarter, new home loans and financings
rose 12 percent sequentially and 18 percent from a year earlier.
Investment banking increased 17 percent from the second quarter
and 44 percent from a year ago. Technical take: Extended after
recent breakout over $10 but good supporting action at 20-day
moving in recent days -- not a buyer at current levels; could use
more of a breather.
Citigroup: Earnings due Thursday before the open (EPS estimate
+210 percent to $0.96 a share; sales +10 percent to $18.8
billion). In the third quarter, Citigroup didn't benefit from the
wave of new mortgages and refinancings as much as its
competitors. Mortgage originations fell 15 percent from a year
earlier to $14.5 billion. Meanwhile, a lending slowdown in Asia
was offset by growth in Latin America. Technical take: Under
accumulation more than the other three, but also extended after
recent breakout over $39. Don't chase. Support at $40.
(c) 2013 Benzinga.com. Benzinga does not provide investment
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