Financial sector exchange traded fund watchers will have their hands full on Tuesday with an unprecedented three banks, J.P. Morgan (NYSE: JPM), Wells Fargo (NYSE: WFC) and Citigroup (NYSE: C), announcing their third quarter results on the first day of the season.
The banks make up a significant portion of financial sector ETFs. Specifically, the Financial Select Sector SPDR (NYSEArca: XLF) includes WFC 8.6%, JPM 7.9% and C 5.5%; the Vanguard Financials ETF (NYSEArca: VFH) allocates WFC 6.9%, JPM 6.0% and C 4.2%; and iShares U.S. Financials ETF (NYSEArca: IYF) holds WFC 6.6%, JPM 6.0% and C 4.2%.
J.P. Morgan has traditionally held the first day of the earnings season, setting the tone for the financial sector, reports Daniel Huang for the Wall Street Journal. Not to be outdone, Wells Fargo moved up its release date back in 2012. While both the companies have issued their earnings results ahead of the Columbus Day weekend in prior quarters, they held back this quarter. Consequently, this will be the first time J.P. Morgan, Wells Fargo and Citigroup will post their earnings results on the same day. [Big Earnings Week Ahead for Big Bank ETFs]
The three banks will be announcing their third quarter numbers before market open Tuesday.
Thompson Reuters estimates that Citigroup will reveal an improved earnings per share of $1.12, compared to $1.0 the previous year, along with revenues of $19.04 billion versus $18.2 billion last year, reports Chris Lange for Wall St. 24/7.
Consensus results also reveal Wells Fargo is expected to come out with $1.02 earnings per share, compared to $0.99 last year, along with $21.1 billion in revenues, compared to $20.48 billion last year. J.P. Morgan’s projections include earnings per share of $1.38, compared to negative $0.17 last year, along with a $24.0 billion in revenues, copmared to $23.88 billion last year.
Looking ahead, financial sector traders will have to keep five things in mind: trading activity, lending growth, expenses, credit quality and underwriting, writes Saabira Chadhuri for the Wall Street Journal.