Big Bank Earnings: Morgan Stanley and Goldman Sachs to Round Out Bank Results
Big Bank Earnings: Morgan Stanley and Goldman Sachs to Round Out Bank Results
- Big bank earnings continue Thursday, January 15, with Morgan Stanley and Goldman Sachs.
- Bank stocks are showing weakness amid broader risk-off move in the market.
- Morgan Stanley and Goldman need to impress against the consensus to hold near key technical levels.
Big bank earnings continue Thursday, January 15
Morgan Stanley (MS) and Goldman Sachs (GS) will round out big bank earnings on Thursday, January 15. Both results will cross the wires before the market open.
So far, bank earnings have disappointed the market, with shares of most big banks dropping through the week alongside broader downward pressure on equity prices. Wells Fargo (WFC) was one of the biggest losers on Wednesday, dropping by 4.6% by the close. Bank of America (BAC) lost 3.7% despite beating analysts’ estimates.
An uncertain backdrop in the market offered few favors to speculators, with the S&P 500 dropping over 0.5% amid worries that the United States would strike Iran amid ongoing protests in the country. Investors also continue to fear a move by the U.S. administration that could cap credit card interest rates.
Trading revenue, dealmaking activity, wealth management and other return metrics will be scrutinized by the market when these banks report figures. Morgan Stanley had a strong third quarter, increasing its dealmaking activity despite an uncertain economic backdrop.
Goldman posted a big beat last quarter thanks to strong performances in its trading segment. Its wealth management segment also performed strongly, increasing assets under supervision and generating higher management fees.
Trading MS earnings
According to TradingView, analysts expect MS to report earnings per share (EPS) of $2.43 on $17.74 billion in revenue. That would compare to a year ago when MS reported EPS of $2.22 on $16.22 billion in revenue.
The bank has a solid history of beating estimates, with it exceeding consensus in every quarter over the preceding year. Last quarter, MS reported EPS of $2.80 on $18.22 billion in revenue.
Technically, MS has dropped to challenge its 21-day exponential moving average (EMA). Prices have found support at the EMA since December, challenging the level twice before rebounding higher. That said, a drop below the EMA could introduce more weakness. Alternatively, this could offer a tactical spot to get long if earnings impress.
Morgan Stanley traded with an implied volatility rank (IVR) of 21.5 as of January 14. The options market shows an expected move of +/- 5.5 points.
Trading GS earnings
Goldman Sachs is expected to report EPS of $11.70 on $14.52 billion in revenue. Compared to the same period last year, GS reported EPS of $11.95 on $13.87 billion in revenue.
Goldman also has a solid track record for beating analysts’ estimates, with EPS and revenue beating consensus in every quarter over the last year.
GS is maintaining prices above its 21-day EMA, and intraday support around the 920 level also appeared on Wednesday, a level that previously offered resistance through December.
Options markets expect a +/- 31 point move for GS. The implied volatility rank was at 18.8 as of Wednesday.
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