Analysts Are Wrong About Bank Earnings – Here’s What to Expect

Starting today, America’s big banks turn in their fourth-quarter 2015 report cards.
A handful of analysts, citing the pounding big banks’ stocks have taken, driving them deeply into ‘Oversold’ territory (with a few trading near their 52-week lows), expect positive earnings news to push share prices sharply higher.
I say, good luck with that.
That’s because there probably won’t be any positive bank earnings surprises – and any unexpected good news will likely get discounted quickly as investors look past short-term revenue bumps or cost-cutting measures and see a tough year ahead.
The KBW Nasdaq Bank Index shows bank shares down 17% from their July 2015 highs, down 15% since December, and down almost 10% so far in 2016. That much negative momentum is going to be hard to overcome.
And if the big banks don’t turn in good report cards – it could spell trouble for markets that have plenty of bad news to deal with already.
Here’s what to expect…

This post was published at Wall Street Examiner by Shah Gilani ‘ January 14, 2016.