Quoted from The Wall Street Journal:
Investors parse mixed signals about the economy and the path for interest rates
By Hardika Singh and Chelsey Dulaney
Updated April 13, 2023 4:47 pm ET
The impact of Silicon Valley Bank’s meltdown on bank profits seems to be limited, according to Wall Street analysts—at least for the big banks. Analysts expect the four banks slated to report first-quarter results Friday morning—JPMorgan Chase, Citigroup, Wells Fargo and PNC—to report an average of $9.37 per share in profit, according to FactSet. That is down 3.3% from the average on Feb. 28, before the regional bank deposit crisis took hold.
“Where they are with regard to deposit flow—that information is going to be critical. We already know that loan growth is slowing so the commentary on those items and if they’re tightening lending standards, we know it’s happening, but the commentary on how much they’re tightening lending standard is going to be key,” said Dan Genter, chief executive of Genter Capital Management.
Mr. Genter said he had reduced his bank stocks exposure at the end of 2022. He is also watching whether banks increase loan-loss reserves.
Elsewhere in markets, gold prices hit their highest level of the year on Thursday, driven by bets that inflation will remain sticky despite recent declines. The most-actively traded gold futures contract rose 1.5% to $2,055.30, closing in on 2020’s record settlement of $2,069.40
The next catalyst for stock markets could be earnings season. PHOTO: VICTOR J. BLUE/BLOOMBERG NEWS