Chillin' out till it needs to be funded
Bank Results season is just around the corner. In the week gone by though the surcharge triggered a series of downgrades, Goldman Sachs down by 53% to $1.85, Citi’s giant reawakening theme by RBC’s Cassidy turned into a more cautious 20% cut for Citi, a 40 cent estimate for Morgan Stanley that seems too optimistic to me but they might be having a good profitable day or two and JP Morgan’s and Wells Fargo’s penalties to HAMP and to the Mort in orbit that they settled for $154 million. According to Bloomberg, the GS consensus estimate is still a $3.28 and Nomura’s $1.85 and Citi’s $2.20 may yet define a new low in negative surprises when GS opens the results season
Fixed Income trading revenue cuts not withstanding, the bigger miss will remain the lower retail banking revenue upticks for Bank of America, Citi and JP Morgan..and the focus on cutting operating cvosts likely to shine an extra penny in profit when the future plans for the big banks are laid. We ourselves will watch the Q2 go down and then comment on where the new strategy map for big banks aggregates even as the surcharge is paid up even more than the statutory 32.5% for the biggest ones.