Earnings Previews: Bank of America, Charles Schwab, Goldman Sachs, Synchrony

The three major U.S. equity indexes closed lower for a third straight session Wednesday. The Dow Jones industrials ended 0.7% lower, the S&P 500 dropped 0.5% and the Nasdaq shed 0.2%. Nine of 11 S&P sectors closed lower. Consumer cyclicals (1.8%) and consumer staples (0.1%) were the only sectors to close higher.

Thursday brings the weekly report on new and continuing claims for jobless benefits (new claims rose by 9,000, defying estimates for a small drop) and the latest producer price index (PPI) reading. Economists expected a month-over-month increase of 0.9% in the PPI, but the index added 1.1%. Core PPI, excluding food and energy, was forecast to rise by 0.5% month over month but the reported increase was slightly lower at 0.4%. All three major indexes were trading lower Thursday morning.

Before markets opened on Thursday, JPMorgan reported second-quarter results that missed estimates on both the top and bottom lines. The bank also suspended its stock buyback program. Shares traded down by about 3% in Thursday’s premarket.

Morgan Stanley also missed top and bottom line estimates Thursday morning. The stock was down about 1% in premarket trading.

Taiwan Semiconductor reported better than expected results on both the top and bottom lines and issued upside revenue guidance for the third quarter. Shares were about 1.5% higher in premarket action.

Ericsson missed the consensus profit estimate but did beat the revenue expectation. The company warned that geopolitical tensions and inflation will lead to higher costs. Shares were down about 9%.

Conagra beat the consensus profit estimate but fell short of revenue expectations. The company issued downside earnings guidance for its 2023 fiscal year and shares traded down by about 2.8% early Thursday.

We have previewed four companies set to report quarterly results first thing Friday morning: Citigroup, UnitedHealth, US Bancorp and Wells Fargo. And there are even more, as Bank of New York Mellon, Progressive and State Street also will report results before Friday’s opening bell.

Here is a look at what to expect from four companies on deck to report quarterly results Monday morning.

Bank of America

Shares of Bank of America Corp. (NYSE: BAC) have dropped by about 22.5% over the past 12 months. All of the decline came in the second quarter. Net interest income is expected to increase throughout the year as the Federal Reserve hikes interest rates, and trading revenue could be strong as investors chase returns. But fee revenue for mortgage originations and investment banking is likely to fall.

This is pretty much the story for all of the country’s largest banks. How BofA demonstrates that it is preparing for a near-certain slowdown, if not outright recession, will have a big impact on investors.

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