next US earnings week: JPMorgan and Citi get ready for the Fed's higher-for-longer strategy

 next US earnings week: JPMorgan and Citi get ready for the Fed's higher-for-longer strategy

According to a Bloomberg article, JPMorgan Chase & Co. is anticipated to perform better than Citigroup Inc. and Wells Fargo in terms of profitability in the forthcoming quarterly earnings releases. But the slowing economy and increasing interest rates pose problems for all three banks.

Due to the persistent possibility of an American recession this year, JPMorgan and its competitors are likely to boost preparations for future loan losses. The growth of net interest income is being impacted by the continually high interest rates, underscoring the significance of cutting corporate expenses.

Walgreens Boots Alliance Inc., PepsiCo Inc., and Domino's Pizza Inc.'s quarterly reports will probably emphasize the decreased purchasing power of American customers. The public's cash reserves are currently lower than they were prior to the COVID-19 epidemic.

next US earnings week - Monday: At the beginning of the week, no noteworthy profits are anticipated. 

- Tuesday: Analysts anticipate a 9.4% increase in PepsiCo Inc. earnings. The last two quarters have also brought double-digit profits to the large cola company. Consumers who are price aware will switch to less expensive brands, according to Goldman Sachs, who also claimed that Pepsi had an advantage over competitors due to its "favorable geographic footprint."

According to the article, Pepsi is motivated to expand its line of snacks, as evidenced by its interest in acquiring Hostess Brands. The corporation may borrow billions of dollars without harming its credit rating, it was added. 

- Wednesday: At the beginning of the week, no noteworthy profits are anticipated.

- Thursday: According to Jefferies, Walgreens Boots' earnings will decline by about 14% this earnings season as a result of the pharmacy segment's ongoing challenges. Earnings are also anticipated to be harmed by operational issues with VillageMD. Analysts are also doubting Walgreen's guidance for 2024 and 2025 in light of recent changes to the chain's senior positions.

Due to rising fuel and labor expenses, estimates for Delta Air Lines were also reduced. BI pointed out that when customers tighten their purse strings, the airline's four-year contracts with pilots, inked in March, will also affect prospects. 

Domestic same-store sales growth for Domino's Pizza were flat in the quarter compared to a year ago, BI said, being held back by fewer delivery orders. BI noted that Domino's Pizza's domestic store sales had decreased quarter-over-quarter (QoQ). Although the fourth quarter could benefit from a revised loyalty program and a new relationship with Uber Eats, Barclays predicted that the worsening global consumer climate would continue to have a negative impact on profits.

Friday: According to statistics gathered by Bloomberg, JPMorgan (JPM US) is expected to have the fastest earnings-per-share growth among the major US investment banks this reporting season. Trading and investment-banking fee declines were largely compensated by a 27% increase in net interest income over the period. According to Piper Sandler, the bank may surpass its full-year NII forecast, defying the effects of steadily rising interest rates. The third quarter report from JPMorgan is due before market. 

Earnings at Citigroup (C US) are probably down 20%, while those at Wells Fargo (WFC US) are probably down 3.9%. Both reports, which are due before the opening bell, will be more closely scrutinized with regard to costs and efficiencies. Even as Citi plans to restructure its organizational structure, rising operating costs are outpacing revenue growth and hurting profitability, according to BI. Wells Fargo has reaffirmed its full-year spending outlook, but there are still chances for more efficiency, according to Piper Sandler.

On its third-quarter results call, PNC Financial Services (PNC US) may elaborate on this month's acquisition of a $17 billion portfolio of capital-commitment facilities from Signature Bank. According to RBC Capital Markets, the purchase should increase earnings by about 10 cents per share in the fourth quarter without significantly affecting PNC's capital ratios. With net interest margin declining for the first time after six consecutive quarters of increase, earnings and revenue are most likely down for the third quarter.

According to Citi analysts, BlackRock's (BLK US) adjusted earnings are expected to decline 11% from a year ago as a result of the company's struggles with decreasing institutional inflows and currency headwinds.