Expectations are low after
|JPMorgan Chase CEO Jamie Dimon|
Investment banking fees are also likely to plunge by nearly 50% quarter-on-quarter as deal-making and capital raising activity came to a standstill.
The weak guidance from arguably the healthiest bank in the country set off a raft of earnings downgrades for the rest of the sector. Analysts have aggressively slashed their earnings estimates for universal banks such as JPMorgan, Bank of America (BAC - Get Report) and Citigroup (C - Get Report) as well as broker-dealers like Goldman Sachs (GS - Get Report) and Morgan Stanley (MS - Get Report).JPMorgan is now expected to post an earnings per share of 96 cents on revenues of $23.73 billion during the third quarter, according to consensus estimates from Thomson Reuters. Barclays Capital analyst Jason Goldberg expects continued loan loss reserve releases and higher mortgage re-finance activity to "soften the blow" from trading and investment banking divisions. Considering that a weak operating performance has been well-telegraphed however, investors and analysts will likely focus on the bank's guidance on future performance during the earnings call. Being the first among the big banks to report, the management is likely to be quizzed a range of issues including its loan demand outlook, how it plans to manage the low-interest rate environment, mortgage litigation expenses and of course, its exposure to Europe. "If