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JPMorgan, Wells Fargo climb on eve of Q3 results

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JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co. (NYSE:WFC) gained in today's trades as the lenders are geared to kick off the U.S. bank earnings season before markets open tomorrow morning.

JPMorgan, the largest U.S. bank by assets, is expected to post weak results, while Wells Fargo, the fourth-biggest U.S. bank by assets, might report strong earnings but feeble revenue.

JPMorgan shares advanced 2.4 percent to 51.98 at 2:16 p.m. in New York, halting a three-day decline. Wells Fargo shares gained 2.1 percent to $41.20. 

JPMorgan's quarterly earnings-per-share is expected to drop 7 percent to $1.31, compared with the $1.40 a share it earned a year earlier. The New York-based lender's revenue might slide 3 percent to $23.65 billion.

U.S. banks are expected to post a 1 percent drop in earnings and 2 percent decline in revenue in the third quarter, Stonecap Securitas said in a note to clients yesterday.

Wells Fargo is projected to report an 11 percent increase in profit to 97 cents a share, compared to 88 cents a share it earned a year earlier. But its revenue might drop 1 percent to $20.96 billion.  

The San Francisco, California-based bank, which is also the country's largest home lender, provided guidance in early September that mortgage originations would decline approximately 30 percent the third quarter compared with the previous quarter. Data from the Mortgage Bankers’ Association supported these actions by showing mortgage refinancing volume declined 50 percent in the third quarter relative to the end of 2012.

JPMorgan shares rallied 13 percent this year before today, and Wells Fargo shares jumped 15 percent, each underperforming the S&P 500 Financials Index (INDEXSP:SP500-40) which gained 20 percent.

The financial conglomerates and major banks industries are expected to show double-digit net income growth rates for the third quarter, while earnings are expected to decline in the savings and regional banks industries year-over-year, FactSet said in a note emailed to clients today.

Citigroup Inc. (NYSE:C), the third-largest U.S. bank by assets, will report its third-quarter results on Tuesday, to be followed by Bank of America Corp. (NYSE:BAC), the second-biggest U.S. lender, Goldman Sachs Group Inc. (NYSE:GS), the fifth-largest U.S. bank by assets, and Bank of New York Mellon Corp. (NYSE:BK), the world’s largest custody bank, on Wednesday. 

Quick facts: JPMorgan Chase & Co

Price: 119.74 USD

NYSE:JPM
Market: NYSE
Market Cap: $364.99 billion
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