Wall Street banks have kicked off the earnings season, with J.P. Morgan Chase (NYSE: JPM) and Citigroup (NYSE: C) revealing improving profits, but the financial sector and related ETFs don’t seem impressed.
The Financial Select Sector SPDR (NYSEArca: XLF), the largest financial sector ETF, was down 0.7% Thursday.
Both J.P. Morgan and Citigroup beat Wall Street profit estimates but revealed a dip in trading revenue, Reuters reports.
JPM shares fell 0.9% and C shares declined 3.1% Thursday. XLF includes a 10.6% tilt toward JPM and 6.4% in C.
“Not a huge reaction to earnings despite relatively healthy quarter out of the early reporters. The risk is similar to the second quarter in that stocks are being priced for perfection,” Bryan Reilly, senior investment analyst at CIBC Atlantic Trust, told Reuters. “But the strength in the global economy has accelerated and a weakening dollar should set up companies for very healthy beats in Q3.”
J.P. Morgan revealed net income of $6.73 billion, or $1.76 per share, compared to profits of $6.29 billion, or $1.58 per share, in the same period last year, the Wall Street Journal reports.
Citigroup announced net income of $4.13 billion, up 7.6% year-over-year, while earnings per share rose to $1.42, the WSJ reports.