Earnings season: will Wells Fargo, Citigroup, JPMorgan Chase meet upgraded expectations?

There is a lot riding on first-quarter earnings reports, with stock investors hoping that solid results will help pull the market higher after it was hit by concerns over a potential trade war and Mideast turmoil.

The banks scheduled to report on Friday include JPMorgan Chase, Wells Fargo and Citigroup. Bank of America will report on Monday.

Ticker	Security	Last	Change	Change %
JPM	JPMORGAN CHASE & CO.	249.72	-0.07	-0.03%
WFC	WELLS FARGO & CO.	76.17	-1.04	-1.35%
C	CITIGROUP INC.	70.87	+0.71	+1.01%
BAC	BANK OF AMERICA CORP.	47.51	-0.26	-0.54%

First-quarter earnings will give an early look at the impact of tax reform. Expectations are that the legislation signed in December by President Donald Trump combined with the strong macro business environment and the likelihood that regulations will be rolled back should be good for banks. But there are some concerns that the good news has already been baked into their stocks and that if earnings are a miss, it would be a big disappointment.

Earlier in the week, Goldman Sachs analysts mentioned in a research note that the downside risks to companies missing earnings expectations will be “substantial.”

Analysts expect banks will benefit from tax reform savings as well as higher interest rates and the possibility for a rollback in regulations. In an April 5 research report on first-quarter earnings, Wells Fargo analysts noted that they had recently upgraded their expectations for banks. That outlook was based on expectations for an upside in capital-markets-related activities, with the analysts noting that trading results should be better than previously forecast.

Wells Fargo also said that loan growth should be in the 6%-7% range. When it comes to total revenue, the analysts expect good growth, in the mid-to-high single digits.