Some of the largest US banks said they got a boost from higher interest rates, but they warned of risks ahead as US consumers cut back on spending.
Investors shrugged off their initial enthusiasm for results from JPMorgan Chase, Wells Fargo, and Citigroup, fearing that things might not be as good as they have been for a while.
JPMorgan Chase GBMN and Wells Fargo UFC.N reported sharp increases in net interest income, according to Reuters.
However, for Citigroup, gains in interest income were overshadowed by weakness in its trading business. These are headwinds that other banks that rely more heavily on Wall Street firms, such as Goldman Sachs and Morgan Stanley, are likely to face when they report results next week.
Separately, BlackRock plc, the world’s largest asset manager, handily beat second-quarter earnings estimates but showed a slowdown in fund inflows.
U.S. bank custodian State Street Corp. (STN) beat earnings estimates for the second quarter after interest income rose 18% year-on-year, although it fell 10% quarter-on-quarter due to lower average non-interest deposit balances.
