The financial services sector is expected to deliver a strong first quarter as JP Morgan Chase & Co. (NYSE:JPM), Citigroup Inc (NYSE:C) and Wells Fargo & Co (NYSE:WFC) kick off earnings season tomorrow.
The S&P 500 Banks Index has risen 23% since early November when US President Donald Trump pledged in his election campaign to cut corporation tax and ease banking regulation.
The index looks set for another boost as analysts expect overall profits in the sector to be 12% higher in the first quarter than a year ago.
Ahead of the opening bell in the US, JP Morgan is forecast to report a 13% increase in earnings per share (EPS)to US$1.52 on a 3.3% rise in revenue to US$24.88bn.
Citigroup is expected to post a 14% increase in EPS to US$1.24 and a 1.6% gain in revenue to US$17.83bn.
Wells Fargo & Co’s EPS is projected to fall 2.02% to $0.97, though revenue is expected to increase 0.50% to US$22.31bn.
Next week Goldman Sachs, Bank of America and Morgan Stanley report their first quarter results.
Goldman and Bank of America to lead the way
Goldman Sachs Group inc (NYSE:GS) and Bank of America Corp (NYSE:BAC) are widely expected to be the stars of the show this season with the biggest contribution to earnings growth in the sector.
Goldman, which reports on 17 April, is anticipated to achieve a 93% jump in EPS to US$5.17 on a 34% increase in revenue to US$8.53bn.
Bank of America reports on 18 April with analysts pencilling in 25% growth in EPS to US$0.35 and a 9.9% rise in revenue to US$21.67bn.