Banks face an earnings test next week
The upcoming large‑bank reports — led by JPMorgan on April 14 — will be watched as a test of market resilience after the inflation shock, with analysts saying the industry is shifting from pure rate windfalls to fee‑based revenue drivers. That means advisory, underwriting and trading fees will matter more for the story than simple net interest income in many investors' models. (markets.financialcontent.com) (markets.financialcontent.com)
Wall Street is about to get a very specific answer on Tuesday, April 14: when inflation jumps and markets wobble, do big banks still make money the easy way from higher loan spreads, or do they need traders and dealmakers to carry the quarter. JPMorgan will release first-quarter 2026 results at about 7:00 a.m. Eastern time and hold its call at 8:30 a.m. Eastern time. (jpmorganchase.com) The calendar is packed right behind it. Wells Fargo and Citigroup are also due on April 14, Bank of America is scheduled for April 15 at 8:30 a.m. Eastern time, Goldman Sachs is expected on April 13, and Morgan Stanley is expected on April 15. (wellsfargo.com) (citigroup.com) (investor.bankofamerica.com) (marketbeat.com 1) (marketbeat.com 2) For the last two years, banks got a tailwind from net interest income, which is the spread between what a bank earns on loans and securities and what it pays depositors. When the Federal Reserve pushed rates higher, that spread widened fast and made plain old banking look unusually profitable. (jpmorganchase.com) Now that tailwind is fading. JPMorgan said at its 2026 company update that it expects 2026 net interest income excluding markets of about $95 billion, while firmwide net interest income is about $104.5 billion, which tells investors the easy rate-driven gains are no longer the whole story. (msn.com) (jpmorganchase.com) That is why the spotlight is moving to fees. Investment banking fees come from advising on mergers, raising stock, and selling bonds, while markets revenue comes from trading desks handling client flows when prices swing around. (jpmorganchase.com 1) (jpmorganchase.com 2) JPMorgan’s own 2025 results show the split clearly. In fourth quarter 2025, investment banking fees were down 5% from a year earlier, but markets revenue rose 17%, with fixed income up 7% and equity markets up 40%, which is what a bank looks like when trading activity is doing more of the lifting than dealmaking. (jpmorganchase.com) The inflation shock matters here because it changes both sides of the business at once. Hotter inflation can push bond yields higher and shake stocks, which usually helps trading desks, but it can also make chief executives delay acquisitions and stock offerings, which hurts advisory and underwriting fees. (financialcontent.com) (jpmorganchase.com) JPMorgan enters the test from a position of scale. The bank had $4.4 trillion in assets and $362 billion in stockholders’ equity as of December 31, 2025, and its corporate and investment bank posted an 18% return on equity in the 2026 company update. (jpmorganchase.com 1) (jpmorganchase.com 2) What investors will listen for on April 14 is less about one headline profit number and more about which engine is still running. If JPMorgan says trading stayed strong, pipelines for debt and stock issuance improved, and the $104.5 billion firmwide net interest income outlook still holds, the read-through will hit the whole bank group within hours. (jpmorganchase.com) (msn.com)
