This Day On The Street
Continue to site
ADVERTISEMENT
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

Fiscal Cliff to Hit Bank Earnings: Analyst

NEW YORK ( TheStreet)-- JPMorgan Chase (JPM - Get Report), Goldman Sachs (GS - Get Report), Morgan Stanley (MS - Get Report) , Bank of America (BAC - Get Report) and Citigroup (C - Get Report) 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.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
BAC $16.73 0.00%
C $54.84 0.00%
GS $204.95 0.00%
JPM $66.65 0.00%
MS $38.04 0.00%

Markets

DOW 18,285.74 +0.34 0.00%
S&P 500 2,130.82 +4.97 0.23%
NASDAQ 5,090.7940 +19.0510 0.38%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs