Big banks report earnings as bank ETF is down 7.7% in a month and Oppenheimer cuts investment banking estimates 9.5%
JPMorgan, Goldman Sachs, Citigroup and Wells Fargo report third-quarter results Tuesday, with Morgan Stanley and Bank of America following Wednesday. Oppenheimer has cut its investment banking revenue estimate by 9.5%, and a bank ETF is down 7.7% in a month, according to The Daily Upside.
The Investor · Invest desk
Deeply distressed US loans rose from $40 billion a year ago to $65 billion in the third quarter, the highest in more than six years, according to JPMorgan.
| Measure | Value | As of | Claim |
|---|---|---|---|
| Deeply distressed US loans | $40 billion | A year ago | 15 |
| Deeply distressed US loans | $65 billion | Third quarter | 15 |
What happened
- Oppenheimer analysts expect "plain vanilla" banking in loans, credit and costs to come in fine, but see capital markets income at the low end of what the market expects.
- Raymond James analysts also expect sound fundamentals and are more optimistic on beats, but want executives to show "credible and achievable" 2027 targets that account for higher interest rates.
- JPMorgan reported earlier this month that deeply distressed US loans reached $65 billion in the third quarter, up from $40 billion a year ago and the highest in more than six years.
- The S&P 500 and Nasdaq Composite both hit all-time highs last week, driven by tech, according to The Daily Upside.
Why it matters
- What doesn't add up contradiction Oppenheimer expects only JPMorgan to top the Street, and Cramer says JPMorgan is priced for near-perfect execution, so the one expected beat sits in the stock Cramer thinks has little room left.
- Who has to decide decision Cramer's stated reasons for Wells Fargo (valuation, improving metrics) and Morgan Stanley (wealth management) are not deal-driven, so a holder of those two is paid for something other than the line Oppenheimer cut.
- Who's exposed exposure Household spending has been resilient, but The Daily Upside says any slowdown would hit banks' fee incomes, a revenue line separate from loan losses.
Next story · Invest · 2d ago
Morgan Stanley's Pick calls AI financing existential as Goldman's Solomon admits demand is unknownConfirmed2 publishers
The Daily Upside and CNBC's Jim Cramer read the same sell-off in opposite directions. The Daily Upside writes that banks face "an awfully high bar" set by investors who dumped shares even though the economy and credit quality remain on sound footing [7]. Cramer said recent weakness in bank stocks could set the stage for a rally if results exceed expectations [8]. Both can hold. A stock that has already fallen needs less good news to rise, and the 7.7% comes from one product, the iShares S&P U.S. Banks UCITS ETF, over one month [3]. The Daily Upside article does not give a price move for any individual bank.
Investment banking revenue is the biggest source of uncertainty in this quarter's results. Oppenheimer cut its aggregate estimate by 9.5% [4], so every $100 of investment banking revenue analysts carried before the cut is now $90.50 (an illustration) [17]. Cramer's offset sits elsewhere: he said Goldman's strength in bond issuance and trading could offset slower deal-making [9]. In our view a bank with a second revenue leg can miss on deals and still report a clean quarter.
Credit is where The Daily Upside sees evidence already, saying support for Dimon's warning has materialized in credit markets [21]. JPMorgan's deeply distressed US loans rose by $25 billion in a year [18], a 62.5% increase [19] on the $40 billion base [15]. Dimon, JPMorgan's CEO, said in a podcast interview last week that he sees a risk that inflation is sticky and rates continue to go up, and that corporations, leveraged or not, should ask whether they are prepared for higher credit spreads when they have to refinance or borrow money [16].
We think the quarter's headline will be set by the investment banking line and the share prices by rates. The week can go several ways: deal revenue beats the cut estimate and Cramer's rally follows; deal revenue misses and trading covers it; or credit surprises. Cramer himself puts rates at the centre. "When it comes to bonds, there's too much supply and not enough demand for the moment. It's coloring everything," he said [12].
Our view would be wrong if investment banking revenue lands above the cut estimate, long yields stay elevated, and the sector rallies anyway. That outcome would favour Cramer's set-up reading over ours.
What to watch
- Wednesday morning's consumer price index, where Cramer is looking for inflation easing outside energy.
- Whether any bank besides JPMorgan tops the Street, which would undercut Oppenheimer's cautious capital markets call.
- Whether Citigroup shows the rebound Cramer says he wants to see.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence55
- Adoption
- Not scored
- Hype gap+10
- Incentives40
- Confidence62
Perspective Coverage
4 publishers- Builder
- Builder 4%
- Operator
- Operator 22%
- Investor
- Investor 74%
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
JPMorgan, Goldman Sachs, Citigroup and Wells Fargo are set to report third-quarter results the day after publication, and Morgan Stanley and Bank of America are scheduled to follow on Wednesday.
- [2]
Tuesday brings earnings from Goldman Sachs, Wells Fargo, JPMorgan Chase and Citigroup; Bank of America, Morgan Stanley and BlackRock round out Wednesday's financial earnings.
- [3]
The iShares S&P U.S. Banks UCITS ETF is down 7.7% in the last month, and the bank sector is among the worst-performing on markets.
- [4]
Expecting a dealmaking slowdown, Oppenheimer analysts slashed their aggregate investment banking revenue estimate by 9.5%.
- [5]
The S&P 500 and Nasdaq Composite both hit all-time highs last week, driven by tech.
- [6]
Oppenheimer analysts expect 'plain vanilla' banking activity (loans, credit and costs) to come in just fine, but warned of capital markets income at the low end of the market's expectations.
- [7]
The banks face an 'awfully high bar' set by worried investors who have dumped shares in recent weeks even though the economy and credit quality remain on sound footing.
- [8]
Jim Cramer said recent weakness in bank stocks could set the stage for a rally if results exceed expectations.
- [9]
Cramer is bullish on Goldman Sachs and Wells Fargo; he said Goldman's strength in bond issuance and trading could offset slower deal-making, while Wells Fargo's attractive valuation and potential for improving metrics make it particularly appealing.
- [10]
Cramer was more cautious on JPMorgan, which he said is priced for near-perfect execution, and wants to see whether Citigroup can rebound.
- [11]
Cramer especially likes Morgan Stanley's growing wealth management business, which provides an important growth driver beyond investment banking.
- [12]
Cramer said: 'When it comes to bonds, there's too much supply and not enough demand for the moment. It's coloring everything and we need to respect how challenging the market can be when interest rates head inexorably higher.'
- [13]
The consumer price index is released Wednesday morning, with Cramer looking for signs that inflation is easing outside of energy.
- [14]
Raymond James analysts expect sound fundamentals and are more optimistic about quarterly earnings beats, but emphasized that executives will have to demonstrate 'credible and achievable' 2027 targets that account for higher interest rates and their impacts to quell investor anxiety.
- [15]
JPMorgan reported earlier this month that the value of deeply distressed US loans rose to $65 billion in the third quarter, up from $40 billion a year ago and the highest in more than six years.
- [16]
JPMorgan CEO Jamie Dimon said in a podcast interview last week: 'I think there's a risk that inflation is sticky, that rates continue to go up and so, for corporations, whether you're leveraged or not, when you have to [refinance] or borrow money are you prepared for higher credit spreads?'
- [17]
After a 9.5% cut, every $100 of investment banking revenue previously estimated becomes $90.50 (illustration only; the source gives no dollar base).
- [18]
JPMorgan's deeply distressed US loans rose by $25 billion in a year, from $40 billion to $65 billion.
- [19]
The rise in deeply distressed US loans at JPMorgan is 62.5% over a year.
- [20]
Oppenheimer expects only JPMorgan to top the Street's expectations.
- [21]
Evidence in support of Dimon's warning has already materialized in credit markets.
- [22]
Household spending has been incredibly resilient, but any slowdown would impact banks' balance sheets by hurting their fee incomes.
Sources
4 independent publishers whose own reporting we read for this story.
- cnbc.comCramer’s week ahead: Earnings kick off as banks and chipmakers face big tests
2 articles · October 9, 2026
- fortune.comWall Street’s big banks deliver mixed earnings. Executives bet the IPO lull won’t last
1 article · October 14, 2026
- qz.comBig bank earnings this week are set to show how surging yields are affecting the economy
1 article · October 12, 2026
- thedailyupside.comBig Banks Earning Week Puts Fears of Slowing Capital Markets Activity in Focus
1 article · October 11, 2026
Topics and entities
Topics
- Interest Rates
- Bank earnings
- Investment banking
- IPO Market