We sent this note to our clients this morning. Unicus team of senior analysts did an analysis on the interconnectedness of the upcoming earnings season. We are sharing this with our Founding member subscribers.
Beware: To all the investors with short exposure, be mindful of the interconnectedness of the bank/auto/consumer debt industries this earnings season.
2Q EARNINGS KICKOFF & THE INTERCONNECTEDNESS OF IT ALL
Tomorrow the big banks officially kick off the 2Q earnings season for 2023.
Citibank (C), JPMorgan Chase (JPM), and Wells Fargo (WFC) report results Friday. Bank of America (BAC), Goldman Sachs Group (GS), and Morgan Stanley (MS) post their second-quarter results next week.
Citibank is expected to see a modest increase in the net interest income to $13 billion from $12 billion a year ago. The bank is also expected to prepare for worsening credit conditions amid a challenging economy. Net charge-offs are expected to climb to $1.5 billion from $850 million a year ago. Citigroup is also expected to have a modest reserve build for soured loans of $276 million, below the $375 million it set aside in the second quarter of 2022.
As we approach earnings seasons, we want short investors to be aware of the interconnectedness of the banks, auto, and consumer debt industries.