Fly Intel: What to watch in first round of big bank earnings reports

JPMorgan (JPM), Wells Fargo (WFC), and Citigroup (C) are scheduled to report quarterly results before the open on July 14. What to watch for: 1. OUTLOOK: During the company's last earnings call, JPMorgan announced a suspension of share repurchases through the second quarter. The bank also said it sees fiscal year net interest income of about $55.5B and second quarter net interest income of about $13.7B. In a regulatory filing back in May, JPMorgan said it expected fiscal year 2020 NII on a managed basis of roughly $56B, market dependent, and adjusted expense for fiscal year 2020 to be below $65B. Meanwhile, Wells Fargo CEO Charlie Scharf said last month that, "There remains great uncertainty in the path of the economic recovery and though it's difficult to accurately predict the ultimate impact on our credit portfolio, our economic assumptions have changed significantly since last quarter. Accordingly, we expect our second quarter results will include an increase in the allowance for credit losses substantially higher than the increase in the first quarter." The bank also said it sees third quarter dividend being reduced from current 51c per share level. 2. 'LARGEST BENEFICIARY': On Thursday, DA Davidson analyst David Konrad upgraded JPMorgan to Buy from Neutral with a price target of $117, up from $102. The analyst believes the company should be the "largest beneficiary" from the increase in Fed liquidity this quarter that's driving a "very strong" bond market and increased risk appetite from investors. Opportunities in FICC and equity derivatives should see JPMorgan's combined investment banking and trading revenues north of $10.5B, Konrad added, stating that the stock's pre-provision net revenue multiple of 5.5-times is "attractive" relative to its peer group. 3. JOB CUTS: Wells Fargo is preparing to cut thousands of jobs starting later this year, potentially setting a bleak precedent for an industry that's been resisting mass layoffs as the coronavirus pandemic worsens, according to Bloomberg Law. Pressure to dramatically reduce costs is coming to a head inside the bank, prompting executives to draft plans that may ultimately eliminate tens of thousands of positions, people with knowledge of the confidential talks said. 4. CRYPTO-EXCHANGES: Bitcoin, which is in the midst of a constructive moment, just got another embrace from traditional investors as JPMorgan is accepting cryptocurrency customers for the first time, according to The Wall Street Journal's Paul Vigna. JP Morgan has accepted Coinbase and Gemini Trust," two well-known bitcoin exchanges" as customers, the author noted. 5. CITI ALLIANCE WITH BLACKROCK: Citi has entered into an alliance with BlackRock (BLK), through its Aladdin business to enhance the delivery of securities services to Citi's clients who utilize the Aladdin end-to-end investment management platform. Connecting to Aladdin Provider, Citi will provide outsourced middle office services directly on a client's instance of Aladdin for integration with their front office, from trade confirmation to post settlement reconciliation. This agreement expands Citi's relationship with BlackRock to whom it provides custody, accounting and/or fiduciary services for certain BlackRock funds domiciled in Hong Kong, Mexico and Colombia. In addition to funds managed by BlackRock, Citi also provides custody services to many asset managers on the Aladdin platform.