Despite beating top line quarterly expectations, shares in US banking giants JP Morgan and Citigroup both fell on Wall Street as trading revenue numbers showed a sharp decline on a year-on-year basis.
Citigroup shares closed 3.4% lower after their trading revenue dropped 16% and JP Morgan shares slipped 1% lower on a 27% fall in year-over-year revenue.
We expect the other major US banks to report the same fall in trading revenue as lower volumes on the NYSE, combined with historically low price volatility, reduces overall market participation.
The next key levels of support are $67.50 for Citigroup and $91.70 for JP Morgan.
On Friday night JP Morgan, Citi and Wells Fargo all reported.
Wells Fargo’s profit dropped for a fourth straight quarter. JP Morgan and Citi beat low expectations, as strength in bond trading volumes picked up in the third quarter.
Citi Group outperformed expectations for third-quarter net profit after trading revenue surged 35 percent. Net income exceeded market expectations, (although fell 11%), coming in at $1.24 per share.
Citi Group (C.NYS)
Well Fargo (WFC.NYS)
JP Morgan (JPM.NYS)
Investors will focus this week on the upcoming earnings results for Goldman Sachs and Morgan Stanley.
In this month’s market strategy recording, we looked at the key levels in the S&P500 and the Dow Jones, with a focus on old resistance becoming new support. S&p500 earnings need to deliver on average, $30 – $32 per share to meet market expectations.
If you missed the recording this month, please sign up at www.investorsignals.com