The first week of the earnings season is normally thin with only a few companies reporting and just a scattering of key players. However, today we will get 4Q earnings from Wells Fargo (NYSE:WFC), scheduled for release at 13:00 GMT with the market looking for earnings per share of USD 0.89.
What to look for in Wells Fargo?
Investors will focus on the bank's net-interest-margin which is at its lowest level in eight years at around 3.6 percent. Next, everyone will scrutinise the mortgage figures to see whether WFC confirms the words of JPMorgan's chief executive, Jamie Dimon, that "US housing has turned a corner". With mortgages, the number to look at is the origination value because it is a leading indicator for future mortgage growth. Last quarter, WFC had around 30 percent of the US market in mortgage origination. Lastly, management's outlook on the US economy is important and could be positive for sentiment in US stocks.
Next week is dominated by financials
Wednesday: JPMorgan Chase & Co.,, eBay, Goldman Sachs and US Bancorp
- Investors will look for the same trends and themes in JPMorgan's (NYSE:JPM)) earnings release as they will today in Wells Fargo.
- eBay (NASDAQ:EBAY)will provide insight into online consumer demand through its auction and payment platforms.
- Goldman Sachs(NYSE:GS) is a different story from Wells Fargo and JPMorgan as this firm is more tilted towards capital markets. Here management's comments on trading and M&A activity will be key for sentiment.
Thursday: Bank of America, Citigroup, Intel, BlackRock and Capital One Financial
- Bank of America (NYSE:BAC) and Citigroup will be dominated by the same trends and themes as JPMorgan and Wells Fargo, but in BAC's case the large mortgage settlement announced this week will be a big topic as investors are looking for further guidance as to when legacy costs will stop being a drag on profits.
- BlackRock,((NYSE:BLK) the world's largest asset manager, will provide good insight into institutional trends and risk appetite in global capital markets.
Friday: General Electric, Schlumberger and Morgan Stanley
- General Electric (NYSE:GE) is always very exciting and interesting to watch as it is probably one of the best gauges of the global economy due to the company's vast industrial divisions producing everything from light bulbs to jet engines.