Bank exchange traded funds (ETFs) were down 1% Wednesday afternoon along with J.P. Morgan shares after the company reported quarterly results.
Deutsche Bank analysts in a research note said J.P. Morgan’s quarterly trading results were better than expected and credit improved, but that mortgage-related issues continued to drag on the bank.
Also weighing on the banking sector was news the Federal Reserve will crack down on mortgage practices at big lenders.
ETFs following the financial sector and bank stocks will see action this week as some of the country’s largest lenders report first-quarter earnings. Bank of America reports on Friday, followed by Citigroup and Wells Fargo next week.
Big banks may report soft revenue on lower lending activity, according to reports. “While loan growth tends to be seasonally weak in the first quarter, this quarter is tracking worse than seasonality would suggest,” Barclays Capital analysts said, Bloomberg reported. “We fear companies have been disappointed.”