· Event impact
Major U.S. Banks Report Q2 Earnings Tuesday; NII and Credit Losses in Focus
Transmission path
Interest rate sensitivity and credit cycle health impacting financial sector equity valuations and broader liquidity reads.
Market mechanism
Interest rate sensitivity and credit cycle health impacting financial sector equity valuations and broader liquidity reads.
Extended read
The banking sector is entering a critical reporting window where the benefits of high rates (NII) are being weighed against the risks of a slowing economy (credit losses). Wells Fargo is of particular interest as it can now expand its balance sheet for the first time since 2018. JPMorgan and Citigroup are expected to show strong capital markets activity, which may offset any softening in retail banking.
Exposed assets
WFC · JPM
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