Wells Fargo, J.P. Morgan, Bank of America, Citigroup and Goldman Sachs are part of Zacks Earnings Preview:

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Jul 14, 2014, 09:30 ET

CHICAGO, July 14, 2014 /PRNewswire/ -- Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Wells Fargo (NYSE:WFC-Free Report), J.P. Morgan (NYSE:JPM-Free Report), Bank of America (NYSE:BAC-Free Report), Citigroup (NYSE:C-Free Report) and Goldman Sachs (NYSE:GS-Free Report).

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Finance Earnings in the Spotlight

The 2014 Q2 reporting season is underway and we have results from 27 S&P 500 members. The reporting pace accelerates this week, with 153 companies announcing second-quarter results, including 60 S&P 500 members. While the Finance sector is heavily represented on this week's reporting docket, we have enough bellwethers from other sectors to give us a good sense of this earnings season.

The low expectations for the Finance sector were borne out by the Wells Fargo (NYSE:WFC-Free Report) report and will most likely be reconfirmed by this week's Finance-heavy line-up of results. One could read through from the Wells Fargo report, particularly on the core banking front, for this week's reporters. But J.P. Morgan (NYSE:JPM-Free Report), Bank of America (NYSE:BAC-Free Report) and Citigroup (NYSE:C-Free Report) reporting this week have sizable capital markets operations that will likely dominate their overall results even if their core banking results reflect the trends we saw with Wells.

That said, Wells' performance with respect to loan and deposit growth and persistent net-interest margin pressures are relevant to the broader industry. With key drivers of core profitability for the group, like net interest income and fee revenues, not expected to show any material improvement in Q2, overall 'core' banking earnings will be essentially the same as we have been seeing in recent quarters.

On the capital markets front, improvement in investment banking (M&A announcements, IPOs, etc.) gets offset by continued weakness in trading volumes, particularly with respect to the fixed income, currencies and commodities (FICC) business. J.P. Morgan and Citi had already indicated more on that front and Goldman Sachs (NYSE:GS-Free Report) will likely be no different. Hard to tell whether the persistent FICC weakness of the last few years is a function of cyclical forces or a result of the new more restrictive regulatory landscape, but we are unlikely to see the bottom in Q2.

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