Dow Earnings Season: What to Expect From Goldman Sachs and JPMorgan Chase Tomorrow

The Dow's earnings season starts with the two financial giants. Find out what everyone's expecting from them tomorrow.

Jul 14, 2014 at 12:30PM
Longview

The earnings season has just started, but already, we've had some pretty good news from the financial sector. Tomorrow, two financial companies among the 30 stocks in the Dow Jones Industrials (DJINDICES:^DJI) will start to weigh in with their results, as JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS) both report earnings before the market opens. Dow investors might well be looking for both bank stocks to give better performances than originally anticipated, considering the results we've already seen from their peers.

JPMorgan Chase expects to release its earnings report at 7 a.m. EDT, with a conference call to follow at 8:30 a.m. EDT. For its part, Goldman Sachs will have a slightly later time schedule, with its earnings issued at 7:30 a.m. EDT and its conference call not beginning until after the market opens at 10:30 a.m. EDT.

Jpm

What's in store for the Dow's financials?
For the most part, investors are nervous about the prospects for both companies. JPMorgan Chase investors expect a nearly 20% drop in year-over-year earnings per share, while Goldman Sachs could see earnings declines in the high teens. Both banks will almost certainly see revenue slide dramatically from year-ago levels.

Yet the reasons for the declines will involve different factors for the two banks. JPMorgan Chase has a much larger personal-banking presence in its business, and huge declines in mortgage activity have led to great fears about the Dow component's ability to attain overall growth. The other big banks that have reported have seen fairly strong results in other areas of consumer banking, with credit cards and other personal loans like auto loans helping to ease the blow of a tough mortgage market. If JPMorgan can match the performance of its peers on that front, then it could reassure investors that when mortgage originations hit bottom, the bank can start growing again.

G

Source: Goldman Sachs.

At the same time, both Goldman Sachs and JPMorgan Chase have exposure to various market- and trading-related businesses, and many of them have gone through tough times recently as well. JPMorgan Chase warned earlier that revenue from its Markets division would fall 20% compared to what it brought in a year ago, as clients trade less amid difficult conditions in the financial markets. Goldman Sachs investors expect similar problems in its market-making segment, where sluggish levels of market activity and volatility have limited the Wall Street giant's ability to take full advantage of its strong position in the financial industry. Competitors have reported difficulties in their respective trading operations, with the fixed-income and equity markets showing some of the weakest performance in light of an uncertain interest rate environment and a lack of volatility in stocks.

Financial stocks have the potential to move the Dow tomorrow, and it's important for JPMorgan Chase and Goldman Sachs to match up to the solid results its peer banks have put in. Otherwise, investors in the Dow Jones Industrials might well conclude that the average's banking components have lost part of their competitive edge against its most important rivals.

JPMorgan Chase + Apple? This device makes it possible.
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its destined to change everything from banking to health care. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here

Dan Caplinger owns warrants on JPMorgan Chase and shares of Apple. The Motley Fool recommends Goldman Sachs and Apple. The Motley Fool owns shares of Apple and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers