Banks’ stocks recover from SVB default

Fri, 10/11/2024

by Ellie LeTu

Source: Financial Times

• Banks’ stocks rose with the economy “soft landing”

  • Bank index KBW increased by 3%, highest since the SVB default in 02/2023.

  • • JPMorgan and Wells Fargo forcast positive net income forecasts on next quarter earnings call (in response to the 50bps rate cut).

• Damages from SVB collapse

  • The latest quarterly earning calls from banks are lower than that of a year ago.

  • Less trust on the US economy, less consumer spendings. 

• Expectations from banks

  • Wells Fargo’s chief expects increase in credit and debit cards usage.

  • JPMorgan's net interest income has risen in Q3, expects to continue in Q4 2024.

  • JPMorgan has raised its investment banking fees, as trading revenues increase.

  • Other big banks like Citigroup, Bank of America, Goldman Sachs, and Morgan Stanley, will release their quarterly earnings calls next week. 

JPMorgan's net interest income (NII) is expected to keep rising in the next quarter as Fed cut 50bps in 09/2024.