NEW YORK — The earnings winning streak in the banking industry may be over.
A terrible spring in the financial markets is expected to leave the nation’s big banks with second-quarter earnings that fall short of their stellar results from the first three months of the year.
That’s bad news for companies that relied on trading profits to mask a still-miserable banking climate with high losses from failed loans and low demand for credit.
Banks begin their second-quarter reports Thursday, when JPMorgan Chase issues its results. But there may be problems in the coming quarters as well.
A number of unknowns are weighing on full-year earning projections and the stocks of big names such as JPMorgan, Goldman Sachs and Morgan Stanley. Among the biggest wild cards: how banks will be affected by the financial overhaul. Fears of a “double dip” recession and Europe’s debt crisis have added to the gloomy outlook.
The news isn’t all bad, though. Smaller banks that don’t bet heavily in the financial markets, including State Street and Fifth Third Bancorp, are expected to post good-to-strong results for the April-June period.
Citigroup and Bank of America report earnings Friday, followed by Goldman Sachs, Morgan Stanley and Wells Fargo next week. All six are expected to post profits.
