Banks Open Earnings Season Into a Midweek CPI Test

JPMorgan, Goldman Sachs, Wells Fargo and Citigroup report third-quarter results on Tuesday, hours before Wednesday’s inflation print can reprice the yields those banks will spend the morning explaining. Bank of America and Morgan Stanley follow on October 14, on the same morning the CPI lands at 8:30 a.m. Eastern.

The 10-year Treasury yield tagged 5.36% on October 7, its highest level since October 2002, then eased toward 5.24% by October 9. That is the rate shock sitting under every net interest and deal-fee number the Street will hear first.

Banks Report Into a Yield Shock That Is Still Moving

FactSet’s models already bake in a quarterly step-down from a second quarter that included SpaceX’s $85 billion initial public offering on June 12, a deal on which all six of the largest U.S. banks served as joint bookrunners. Year over year, the same models still show higher earnings per share at every one of those six names. The stocks have not waited for the releases to settle the argument.

The Invesco KBW Bank ETF had jumped more than 18% in three months to a record on August 14, then dropped more than 12% from that high while the S&P 500 drifted slightly higher. In the month through early October the Financial Select Sector SPDR Fund lost about 4%, and the five major banks shed roughly $350 billion of market value. Truist Securities found that only 35% of institutional investors now expect bank stocks to outperform the broader market, down from 68% in July and 82% in December.

Marinac, director of research at Brean Capital, said the slide was the market “pricing in higher interest rates that had been ignored in prior months.” He also said a cooling-off was warranted after a strong three months for stock prices before August.

Now people will focus on the fundamentals, which are still pretty good.

Marinac, director of research, Brean Capital

That is the setup for October 13: profits that still look decent against last year, share prices that have already paid for a higher path of long rates, and an inflation report the next morning that can move those rates again.

Tuesday’s Prints Land Hours Before the Inflation Data

The calendar is the trade. Four money-center banks, UnitedHealth and Johnson & Johnson all report before the open on October 13. CPI is not a Friday footnote. It sits in the middle of the bank tape, with ASML, Bank of America, Morgan Stanley and BlackRock on the same Wednesday, then producer prices and Taiwan Semiconductor on Thursday.

THE WEEK’S COLLISION COURSE

1. Tuesday, October 13: JPMorgan Chase, Goldman Sachs, Wells Fargo and Citigroup report before the open, joined by UnitedHealth and Johnson & Johnson. JPMorgan’s release is due about 7:00 a.m. Eastern, with a call at 8:30 a.m. Wells Fargo also aims for about 7:00 a.m., with a call at 10:00 a.m. UnitedHealth’s call is at 8:00 a.m. Eastern.
2. Wednesday, October 14: The Bureau of Labor Statistics publishes the September CPI due October 14 at 8:30 a.m. Eastern, alongside real earnings. Bank of America, Morgan Stanley, BlackRock and ASML report the same morning.
3. Thursday, October 15: Producer prices print at 8:30 a.m. Eastern. TSMC holds its earnings call from 2:00 to 3:30 a.m. Eastern, 14:00 to 15:30 Taiwan time. Charles Schwab and PNC also report.
4. Friday, October 16: Import and export price indexes print at 8:30 a.m. Eastern.
5. October 27-28: The Federal Open Market Committee meets, fourteen days after Tuesday’s bank reports.

Monday, October 12 is Columbus Day, so the tape goes from a holiday quiet into that two-morning pile-up. Guidance offered on Tuesday can be marked to a new 10-year yield before Bank of America’s call is even finished.

A Hangover From June’s $85 Billion IPO

FactSet’s third-quarter EPS estimates sit well below second-quarter results and still above the year-ago quarter. JPMorgan is modeled at $5.93 a share, down from $7.70 in the second quarter and up from $5.07 a year earlier, a sequential drop of about 23%. Goldman Sachs is modeled at $12.86, down from $20.98 and up from $12.25, a sequential drop of about 39%.

FACTSET’S Q3 BANK MODELS

Net interest income is the offset. FactSet sees JPMorgan’s NII at $26.88 billion, up 5.4% from the second quarter and 12.2% from a year earlier, the strongest sequential and year-ago gains among the four large deposit takers. Bank of America is modeled up 3.0% sequentially, Wells Fargo up 2.6%. Citigroup is the exception, with NII modeled down 2.9% from the second quarter even as it is still up 11.3% from a year ago.

Fee books go the other way. JPMorgan’s noninterest income is modeled down 24.5% from the second quarter, Bank of America’s down 13.1%, Goldman’s down 12.9%. Against last year those fee lines still rise at JPMorgan (+8.2%) and jump at Goldman (+25.7%). The year-ago comparison is the one management will prefer. The sequential comparison is the one that matches what shareholders just lived through in the share price.

What Wednesday’s CPI Means for Bank Guidance

Economists in a Bloomberg survey see the September consumer price index up 0.6% on the month after a 0.4% rise in August, which would be the largest monthly advance in five months, with the core measure up 0.2% after 0.3%. Core CPI is seen at 2.5% over twelve months, a touch firmer than August’s 2.4%, which had been the smallest annual core increase since 2021. August’s headline index was up 3.4% over the year. RBC Economics is in that same 0.6% headline, 0.2% core camp and headline CPI at 0.6 percent is paired there with a 0.9% monthly jump in producer prices on October 15.

The Federal Reserve raised its target range to 3.75% to 4.00% at the September 15-16 meeting. CME FedWatch on October 10 priced an 82% chance of a hold at the next decision, a 17% chance of a hike and a 1% chance of a cut. September payrolls rose 29,000 and the unemployment rate was 4.2%. A hot headline print driven by gasoline can still lift the 10-year even if core cools, which is the path that would rewrite Tuesday’s net-interest commentary before the close on Wednesday.

Matt Stucky, chief portfolio manager for equities at Northwestern Mutual, said banks are still asset-sensitive, meaning loans reprice faster than deposits, and he expects a positive trend for NII because the bond selloff has lifted intermediate and long-term Treasury yields. That story holds only if deposit costs do not catch the 10-year on the way up. A 5.36% peak already tests that lag.

Loan Books Widen as Deal Fees Fade

Management has already sketched the split. JPMorgan Co-President Doug Petno told an investor conference last month that investment-banking fees and trading revenue were tracking a rise of a “mid-to-high teens” percentage. Bank of America Chief Executive Brian Moynihan said investment-banking fees would drop by at least 10% in the third quarter, with sales and trading roughly flat, comments that hit the shares. Goldman Sachs Chief Executive David Solomon told investors to expect a muted third quarter, with fixed income, currencies and commodities softer and equities stronger. Wells Fargo Chief Financial Officer Mike Santomassimo said third-quarter net interest margin would be better than earlier expected and kept full-year NII near $50 billion.

WHAT THE BANKS HAVE ALREADY TOLD INVESTORS

• JPMorgan fees: Petno pointed to investment banking and trading up in the mid-to-high teens, a year-ago comparison that still has to clear the SpaceX quarter.
• Bank of America fees: Moynihan flagged investment-banking fees down at least 10% and trading about flat, the weakest pre-announcement of the group.
• Goldman tone: Solomon called the quarter muted and split the markets book, FICC softer and equities better, which fits FactSet’s $12.86 EPS against a $20.98 second quarter.
• Wells Fargo NII: Santomassimo held full-year net interest income near $50 billion and said loan growth in 2026 should beat the prior forecast, with U.S. spending and credit still healthy.
• Credit watch: Deutsche Bank research puts the specially serviced rate on securitized commercial real estate at 12%. Marinac puts criticized CRE on bank books closer to 4% or 5% and said losses will rise without becoming substantial at the largest firms.

Macrae Sykes, portfolio manager of the Gabelli Financial Services Opportunities ETF, said the No. 1 credit input is unemployment, “which has been under 5% for 61 consecutive quarters,” and pointed to high consumer spending and rising household net worth. That is the bull case for the loan book. The bear case is deposit costs and a 10-year that has already done a decade-plus of work in a few weeks.

UnitedHealth, ASML and TSMC Share the Window

UnitedHealth reports before the open on October 13, the same morning as the banks, with a call at 8:00 a.m. Eastern. Analysts cluster around $4.12 a share on about $111.3 billion of revenue, well below the second-quarter adjusted $6.38 that beat a $4.94 consensus. The medical care ratio, the share of premiums spent on care, fell to 86.7% in the second quarter from 89.4% a year earlier, and the company has set full-year adjusted EPS at $19.50 to $20. A miss on medical costs would hit the tape beside JPMorgan’s NII, a messy mix for a single session.

ASML reports on October 14 in Amsterdam, before the U.S. CPI release, and will be read as a check on wafer-equipment demand. TSMC is still in a quiet period from October 5 through October 14, so the foundry cannot talk while Wednesday’s inflation number moves chip multiples. Its own call starts at 2:00 a.m. Eastern on October 15. Management has already posted a Q3 revenue guide of $44.6 to $45.8 billion, with gross margin 65% to 67% and operating margin 56% to 58%, after a second quarter of $40.20 billion in revenue, 67.7% gross margin and 60.3% operating margin.

That is a second collision inside the same week. Bank CEOs will talk about loan demand and deal pipelines on Tuesday. By Thursday morning the market will also have a fresh CPI, a PPI print and the first look at whether AI foundry revenue is still tracking the high end of a $44.6 billion to $45.8 billion band. The bank stories and the chip stories will be marked to the same 10-year.

The Fed Vote on October 27 and 28

Fourteen days after JPMorgan’s call, the FOMC sits for its October 27-28 FOMC meeting. September’s minutes, released October 7, are already on the site; October’s statement is not. The funds rate is 3.75% to 4.00%. Futures on October 10 still treated a hold as the base case, with a hike as the tail.

If Wednesday’s core print cools as the 0.2% median implies, Tuesday’s NII optimism can survive a day. If gasoline shoves headline CPI up 0.6% and the 10-year heads back toward 5.36%, the same bank slides that praised asset sensitivity will be defending deposit costs and fee droughts into a tighter discount rate. TSMC then speaks into that tape at 2:00 a.m. Eastern on October 15, after its quiet period ends and after the inflation number has already moved the bond that prices every duration-sensitive multiple in the market.

Disclaimer: This article is news reporting and analysis of scheduled earnings, inflation data and interest-rate policy, and it is for information only. It is not investment advice, a recommendation to buy or sell any stock, bond, ETF or futures contract, or a forecast of Federal Reserve action. Readers should consult a licensed financial adviser or investment professional who can consider their own objectives, risk tolerance and tax situation before acting. Figures, consensus estimates, implied odds and corporate guidance are taken from the sources named here as of the dates in the piece and will change as companies report and as new data arrive.