This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bank Stocks Soar as Debt Deal Prospects Brighten: Financial Winners (Update 1)

Stocks in this article: JPM WFC I:BKX

Yellen is a former CEO of the Federal Reserve Bank of San Francisco and has served as vice chair of the Federal Reserve Board since 2010.

KBW Washington analyst Brian Gardner in a note on Wednesday wrote that despite some opposition from Republicans in the Senate to Yellen's nomination, "we expect her to be easily confirmed."

Gardner also addressed the potential opposition of Yellen based on her support of the Federal Reserve's extraordinary monetary stimulus efforts. "We should also add that prominent inflation hawks like John Taylor have praised Dr. Yellen's qualifications and the ability to handle the job while disagreeing with her on policy. In our view, this makes it tough for a critical mass of Republicans to block the Yellen nomination."

Time to Focus on Bank Earnings

Earnings season for major U.S. banks will kick off early Friday, when Wells Fargo (WFC) announces its third-quarter results, with JPMorgan Chase (JPM) also reporting before the market open.

Plenty of coverage heading into third-quarter earnings season has centered on the major decline in mortgage loan production, as rising long-term interest rates have curtailed the refinancing wave. Atlantic Equities analyst Richard Staite in his preview for eight large-cap banks on Sept. 23 estimated the group's third-quarter mortgage production revenue would plunge 45% from the second quarter and 55% from the third quarter of 2012.

Staite also estimated that trading group for the eight large-cap banks he covers -- including Wells Fargo, JPMorgan, Bank of America (BAC), Citigroup (C), Morgan Stanley (MS), U.S. Bancorp (USB) and PNC Financial Services Group (PNC) -- would decline 20% in the third quarter from a year earlier.

But despite those painful revenue declines, Staite estimated a total revenue decline of just 5% year-over-year for the group, reflecting a continuing decline in expenses and "relatively stable net interest income."

For Wells Fargo, the consensus third-quarter net income estimate among analysts polled by Thomson Reuters is $5.229 billion, or 97 cents share, compared to 98 cents the previous quarter and 88 cents a year earlier. The consensus third-quarter revenue estimate is $20.973 billion, declining from $21.378 billion in the second quarter and $21.213 billion in the third quarter of 2012.

Wells Fargo's shares on Thursday rose over 2% to close at $41.22.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
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!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from Bankrate.com

  • 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