NEW YORK ( TheStreet) -- Investors looking for a bounce from the financial ETFs may have to wait until Friday, when Bank of America ( BAC) and Citigroup ( C)report earnings.
J.P. Morgan ( JPM) blew past earnings estimates of 70 cents per share in the past quarter with earnings of $1.07 per share. Even backing out one-time charges, the bank earned a solid 87 cents per share. Financial reform doesn't appear to be a roadblock for the firm, as current analysts predict that the bill, if passed, will only knock 2% off JPM's 2011 revenue. However, in today's conference call, JPM CEO Jamie Dimon said, "Let them estimate whatever they want." Until the financial reform bill is signed, I don't expect to hear an estimate from the bank. On the conference call, the bank did say that lower overdraft fees will reduce earnings by about $200 million a year, while the financial reform bill could end up raising that number to $700 million, which would translate into about 15 cents per share based on the current shares outstanding. The mostly positive earnings report wasn't enough to lift the market or financial ETFs today, but that's partially due to the fact that solid earnings from J.P. Morgan come as no surprise. Investors consider J.P. Morgan one of America's strongest of the big banks, if not the top player in the banking arena. Meanwhile, Bank of America and Citigroup report tomorrow. Analysts predict 22 cents per share from the former and 5 cents per share from the latter. However, these banks are not considered as strong as JPM as evidenced by this morning: JPM was down about 1.3% in early Thursday trading, while both C and BAC were off by more than 3%. However, less positive investor sentiment makes it easier for these banks to surprise investors on the upside and today's decline leaves financial ETFs positioned for a bounce. The bank with more potential to influence investor sentiment is Citigroup. It helps that the struggling bank's outlook is quite negative; analysts predict sales have contracted by 26% year over year in the past quarter.