From Nasdaq: 2024-04-12 16:28:00

The quarterly releases from major banks like JPMorgan, Citigroup, and Wells Fargo did not impress the market, with underwhelming guidance noted from JPMorgan. Despite good enough results without major surprises, the stocks’ outperformance before the reporting cycle could explain the market’s tentative reaction. The early Q1 earnings season scorecard for the Finance sector shows positive growth momentum.

JPMorgan’s net income for the period was up +10.7% on +11.7% higher revenues, with net interest income up +4.9% and investment banking revenues up +8%. Wells Fargo saw net income down -3.1% on +4.2% higher revenues, with net interest income down -8% and loans and deposits decreasing. Citi also beat on EPS but fell slightly short on revenues due to ongoing restructuring efforts.

The Q1 earnings season is ramping up this week, with notable companies like United Health, Netflix, and Johnson & Johnson reporting results. So far, 30 S&P 500 companies have reported with overall earnings up +21% on +5.8% higher revenues. Positive surprises in earnings are currently scarce, with expectations showing modest growth in margins and net margins for various sectors.

The Tech sector is expected to show strong growth in 2024 Q1, a significant contributor to the S&P 500’s total earnings. Excluding Tech’s impact, overall Q1 earnings for the rest of the index would be down -2.4% from the same period last year. Tech’s positive growth outlook is crucial for keeping the aggregate growth picture in positive territory.

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Read more at Nasdaq:: The Q1 Earnings Season Kicks off Positively