After making less impressive headlines in the past few months, the banking crisis has led to a comeback in the financial reports of major banks this week. From JPM, Wells Fargo (WFC), and Citigroup (C), here are the expected earnings for major banks this week, and what you can expect from them:

The Trajectory of Big Banks: A Brief Review

As is well known, some well-known figures in the banking industry announced the bankruptcy of Silicon Valley Bank (SVB) on March 10th, and the turmoil of other major banks took over this event.

Since the collapse of SVB, major banks JPMorgan Chase, Wells Fargo Bank, and Citigroup have fallen by 4.6%, 8.3%, and 5.1%, respectively, due to concerns that investors may be worried about the future of the banking industry due to a recession.

In addition, recent comments by Jamie Dimon, the CEO of JPMorgan Chase, about the banking crisis have exacerbated these concerns and market tensions. On April 4th, Damon revealed in a letter to shareholders of JPMorgan Chase that the banking crisis may not be over and its impact may still cause ripples in the market in the near future.

Damon elaborated on the collapse of SVB and Signature Bank last month, as well as the emergency purchase of Credit Suisse (CSGN. VX) by its competitor UBSG. VX, which not only caused market tension but also could lead to lenders withdrawing funds, which could increase the risk of an economic recession. He also stated that the impact of this crisis on American consumers remains to be observed, and many people, including US President Joe Biden, have been calling for strengthened regulatory scrutiny of the banking system. This fact may only increase the likelihood of sustained pressure on banks.

Nevertheless, Damon continued to explain that although the crisis has not yet ended, he believes it will not be as severe as the 2008 financial crisis.

Therefore, after these comments, traders may be more eager than ever to pay attention to the upcoming earnings report this week, see how big banks are performing, and see if Damon's concerns will be established.

Are JPMorgan Chase and Citigroup firmly established in the face of banking crises?

On Friday, April 14th, with the expected financial reports from multinational banks JPMorgan Chase and Citigroup, the first quarter of 2023's financial reporting season was in full swing. Despite the recent overall economic recession, especially the banking industry turmoil, the upcoming earnings outlook for JPMorgan Chase and Citigroup is more optimistic than expected.

According to analysts' estimates, JPMorgan Chase is expected to report revenue growth and year-on-year revenue growth for the first quarter of 2023. In addition, some analysts expect the bank to report earnings per share of $340 and revenue of $35.37 billion. If these numbers are indeed achieved, then compared to the first quarter of 2022, this will achieve a 15.2% revenue growth and a year-on-year increase of $29.3 in earnings per share.

As for Citigroup, some analysts believe that the revenue of this large bank may be higher, at $19.92 billion, which is 3.8% higher than the figure in the first quarter of 2022. However, earnings per share are expected to reach $1.67, compared to $2.02 in the same period last year. However, the consensus seems to be that the company may exceed expectations in Friday's scheduled earnings release.

If the bank's earnings exceed expectations, the market may react positively, and vice versa, which may not be surprising. (Source: Yahoo Finance)

Expected growth of Wells Fargo Bank

Wells Fargo Bank is another major bank and may indicate in its 2023 first quarter earnings report due to be released on Friday that it has weathered the recent economic headwinds.

This is because, similar to JPMorgan's forecast, the market's expectation for this financial giant seems to be that it will report year-on-year profit growth and higher revenue. In addition, the largest mortgage lender in the United States is expected to report earnings per share of $1.16, a year-on-year increase of 31.8%, while revenue is expected to increase by 15.6% compared to the same period last year, reaching $20.33 billion.

Overall, for now, analysts seem optimistic about the upcoming earnings reports of these major banks, despite recent economic obstacles and banking crises. Therefore, if these positive predictions are true, the market may be able to compensate for some of the losses that have occurred in the past few months. Otherwise, Damon's concerns about economic recession may intensify, and the market may become more volatile than ever before.

Therefore, a cautious approach may be to track the upcoming earnings data that will be released on Friday, and in addition, pay attention to any upcoming financial reports that may affect the market. Especially this week, the minutes of the Federal Open Market Committee meeting of the Federal Reserve and the US Consumer Price Index are expected to release data on Wednesday, both of which may change the market process.