April 11-15 | Bank Stocks and Luxury: ready for a new earnings season?

It’s that time again! Earnings season is coming up, where public companies release their quarterly figures for everyone to see. We’ll also get crucial forecasts for the future and investors can check the financial health of every company and sector. In these turbulent times, more than ever, it’s important to take the pulse of the market!

First up: Wall Street banks

As is tradition, we’ll kick off earnings season with the big Wall Street banks. And this will probably set the tone for the markets this week.

After a difficult first quarter, most of the big banks on Wall Street seem to be slowly recovering. Crucially, the growth of their dividends has been enough to outpace the rate of inflation. In other words, by investing in JPMorgan Chase or Blackrock, for example, it is possible to increase your purchasing power along the way. On the other hand, earnings-per-share and revenue growth is expected to be weak this quarter.

In particular, investors are keeping an eye on the following three companies:

  • JPMorgan Chase – Reporting earnings on Wednesday, April 13th, the bank is expected to post earnings-per-share of $2.76, down nearly 40% from last year. Revenue estimates come in at around $31.23 billion, a year-over-year growth of 2.7%.
  • Citigroup – Citi will report on Thursday, April 14th with earnings expected to come in at $1.80 per share. That’s down 50% from last year. The bank’s revenue is expected at $18.54 billion, a drop of 4.1% compared to last year.
  • Wells Fargo – Wells Fargo will also report on Thursday, April 14th. Analysts expect earnings-per-share of $0.82, down almost 20% from last year. Revenue is also expected to decline by 1.3% to around $17.83 billion.

How is French luxury doing?

2021 was a year of recovery for major luxury companies with profit margins hitting record highs. But then 2022 arrived with rising prices, supply chain problems and a complete shutdown of retail in Russia. So the luxury sector is now experiencing a difficult start to the year.

However, unlike other industries, the luxury companies often seem to keep their head above water. Why? Luxury companies have a high-end clientele which is less impacted by price rises. They can also tap into accelerating emerging markets like China and Brazil. Pietro Beccari, CEO of Dior, explained: ”Our sales are much higher than they were in 2019, and we have experienced double-digit growth in recent years.”

This week, three French luxury companies will publish their figures: LVMH on Tuesday, April 12th. Hermès on Thursday, April 14th, and Christian Dior on Friday, April 15th. You can also watch the France 40 Index ETF (Lyxor) which tracks the French CAC 40. Luxury companies make up a large portion of this index (LVMH accounts for 15%).

Economic and earnings calendar

Monday – Trade balance in the Netherlands (February). Industrial production in Belgium (February).

Tuesday –  Final inflation rate in Germany and the United States (March). Trade balance in France (February). ZEW index of economic sentiment of investors in the euro zone (April). Monthly report of the Organization of the Petroleum Exporting Countries (OPEC). LVMH quarterly results.

Wednesday – Final inflation rate in Spain (March). IEA energy report in France (March). Industrial production in Italy (February). Quarterly results of JPMorgan Chase, Blackrock, Delta Air Lines, Argan..

Thursday – European Central Bank decision on key interest rates, followed by a press conference. US weekly unemployment figures. Quarterly results of UnitedHealth, Hermès, Morgan Stanley, Wells Fargo, Goldman Sachs, Citigroup.

Friday – Figure of new vehicle registrations in the euro zone. Final inflation rate in France and Italy (March). Trade balance in Belgium and Ireland (February). Industrial production in the United States (March). Christian Dior quarterly results.

We’ll be back next week for another edition of the BUX Breakdown. In the meantime, have a great week on the markets!

The BUX Breakdown was written by Clémentine Pougnet.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.