This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Fiscal Cliff to Hit Bank Earnings: Analyst

Stocks in this article: JPM C BAC GS MS

NEW YORK ( TheStreet)-- JPMorgan Chase (JPM), Goldman Sachs (GS), Morgan Stanley (MS) , Bank of America (BAC) and Citigroup (C) will see reduced trading revenues due to investor concerns about the impending " fiscal cliff" of across the board cuts that will kick in if Congress cannot reach a deal on the U.S. budget , according to a Deutsche Bank report published Tuesday.

"We worry both issuance and trading volumes could slow into year end given seasonal factors and fiscal cliff uncertainty," writes Deutsche Bank analyst Matt O'Connor. He estimates revenues in fixed income, currencies and commodities could fall 15-20% versus the third quarter, compared to his previous estimate of a 10% decline.

Equity issuance is also set to decline by about 20%, according to O'Connor, though he argues third quarter numbers were boosted by "a large low margin deal," which he does not name.

O'Connor reduced his Bank of America fourth quarter profit estimate to 16 cents per share from 18 cents versus the First Call consensus target of a 20 cent profit. For Citigroup, he brought his estimate down to 91 cents from $1.00 compared to a $1.05 consensus. He brought his Goldman Sachs estimate down to $3.85 ($3.20 adjusting for a one time gain) versus his earlier $3.53 estimate, which did not count the gain. The consensus is at $3.35. O'Connor's estimate for JPMorgan came down to $1.22, in line with the consensus target, from a prior $1.25. He now sees Morgan Stanley earning 25 cents per share versus a prior 28 cents and a 37 cent consensus.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs