In addition to Citigroup, other large banks, such as JPMorgan Chase & Co. and Wells Fargo & Co. will report fourth-quarter earnings this week. Additionally, Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley will report later this week.
The financial sector ETF Financial Select Sector SPDR (NYSEArca: XLF) was up slightly at 0.65 percent.
Cost-Cutting Measures
In order to curb the weakness in its fixed-income trading, Citigroup cut costs by 4 percent, including a 6 percent reduction in compensation. Those cost-cutting measures combined with a lower-than-expected tax rate helped to bring forth the positive earnings.
U.S. equities appear to be rebounding from its December doldrums, but according to Gerspach, it’s too early to tell if the recent strength is sustainable.
“Volatility has somewhat moderated and both equity prices and yields have shown signs of stabilization,” Gerspach said. “But, again, it’s really early and market conditions — even though there have been improvements — they have yet to fully recover at this point.”
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