Preview of US Stock Earnings Reports: Wells Fargo, JPMorgan on the Horizon

Renowned banks such as Wells Fargo, JPMorgan Chase, and Goldman Sachs are about to disclose their annual reports for the 2024 fiscal year. Before these reports are released, let's have a brief discussion.

First, let's talk about JPMorgan Chase, one of the oldest and most powerful banks in the US financial system.

 

In the third quarter of 2024, JPMorgan Chase's revenue reached $43.32 billion, exceeding the market-wide expected $41.63 billion. Its net profit was $12.9 billion, with earnings per share of $4.37, significantly higher than the market-expected net profit of $11.6 billion.

 

After the release of the third-quarter earnings report, the stock price rose as expected. For the fourth-quarter earnings report to be announced this time, through my research, the market generally anticipates that JPMorgan Chase's total revenue will be $41.7 billion. In contrast, in the fourth-quarter earnings report of 2023, its total revenue was only $38.57 billion.

From a technical perspective, JPMorgan Chase's stock has been in a long-term upward trend. It reached a peak of 250.2, then declined to 230.6. At this level, it found support and resumed its upward movement.

 

Currently, the stock price has stabilized above the 50-day moving average and is advancing towards the previous high.

 

The RSI (Relative Strength Index) also shows an upward trend. Currently at 55, it is in the middle of the common fluctuation range but is gradually approaching the 70 over-bought line.

 

Under these circumstances, the stock may form a double-bottom pattern. The double-bottom pattern is a relatively reliable bottom-reversal pattern.

 

Therefore, the stock is expected to resume its upward trend in the future. Overall, the medium-term technical outlook remains positive.

 

Next, let's turn to Wells Fargo.

Looking at Wells Fargo's previous earnings reports, in the first three quarters of 2024, both its revenue and net profit showed a certain degree of fluctuation.

 

In terms of revenue, in the first quarter of 2024, it was $31.899 billion, representing a year-on-year increase of 10.66%. In the second quarter, it was $31.755 billion, with a year-on-year increase of 8.99%. In the third quarter, it was $31.804 billion, a year-on-year increase of 22.94%. Regarding net profit, in the first quarter, it was $4.619 billion, a year-on-year decrease of 7.45%.

 

In the second quarter, it was $4.910 billion, a year-on-year decrease of 0.57%. In the third quarter, it was $5.114 billion, a year-on-year decrease of 11.32%.

 

 

Wells Fargo was once the favorite of the "Oracle of Omaha," Warren Buffett. Buffett was once the bank's largest shareholder, with the market value of his holdings reaching as high as $32 billion.

 

In the first quarter of 2022, after holding the shares for 33 years, Buffett completely sold off his stake in Wells Fargo. Industry insiders analyzed that Buffett may have detected risks in Wells Fargo's operation and management, which coincides with the issues reflected in its earnings reports, namely, revenue growth accompanied by a decline in net profit.

 

Interestingly, in May 2024, Wells Fargo fired more than a dozen employees for "pretending to work actively." These employees were from the Wealth and Investment Management department. After an investigation revealed that they used keyboard simulators to feign an appearance of active work, the bank decided to terminate their employment.

 

This incident also reflects that there are numerous problems within Wells Fargo. Nevertheless, given the overall recovery of the US banking industry, Wells Fargo should still have significant opportunities.

 

However, I do not recommend investing in companies that may have internal management and operational issues.

 

Well, that's all for this preview. There's no point in talking too much. Let's wait for the release of the earnings reports and then discuss further.$JPM $WFC