Major U.S. bank stocks, tracked by the Financial Select Sector SPDR Fund XLF, are set to hit new highs after strong earnings reports for the third quarter.
The fund gained nearly 0.7% in premarket trading, riding the wave of last week’s rally. Regional banks also saw gains, with the SPDR S&P Regional Banking ETF KRE rising 0.5%.
Major banks like Goldman Sachs GS, Bank of America BAC, Citigroup C, and Charles Schwab SCHW all surpassed analyst expectations, boosting investor confidence.
Goldman Sachs: Huge Q3 Earns Drive Stock Highs
Goldman Sachs reported Q3 earnings of $8.40 per share, well above the $6.88 forecast, and revenue of $12.7 billion, exceeding the $11.7 billion estimate. Key highlights include:
- Equities trading revenue: $3.5 billion (forecast: $2.95 billion)
- Global banking revenue: $8.55 billion (forecast: $7.65 billion)
- Total deposits: $445 billion (up 2.8% from last quarter)
- Assets under management: $3.1 trillion (expectation: $2.99 trillion)
Stock Reaction: Shares jumped nearly 3%, reaching a record high of $537.50.
Bank of America: Strong Q3 Growth
Bank of America reported earnings of $0.81 per share, beating the $0.76 estimate, with overall revenue of $25.34 billion, slightly ahead of expectations. Key points include:
- Net interest income: $13.97 billion (forecast: $13.9 billion)
- Investment banking revenue: $1.4 billion (estimate: $1.24 billion)
- Trading revenue: $4.94 billion (expectation: $4.57 billion)
Stock Reaction: Shares rose 2% to $42.79.
Citigroup: Strong Trading and Wealth Management
Citigroup’s EPS was $1.51, exceeding the $1.31 estimate, with Q3 revenue of $20.32 billion, above the $19.86 billion forecast. Highlights include:
- FICC sales & trading: $3.58 billion
- Wealth management: $2 billion (forecast: $1.8 billion)
- Investment banking: $934 million (estimate: $874.5 million)
Stock Reaction: Shares increased 2.4% to $67.50.
Charles Schwab: Earnings Surge
Charles Schwab posted EPS of $0.77, above the $0.75 estimate, with revenue of $4.847 billion, slightly beating forecasts. Stock Reaction: Shares soared 9% to $73.78.
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