To The Moon

**Title: Navigating Challenges: U.S. Banks Face Headwinds in Q4 Earnings Amidst Falling Interest Rates and Bad Debts 🌧️** **Introduction:** Hey there! In the world of falling bond yields, U.S. banks had a tiny bit of hope in the fourth quarter. But, guess what? It might not be enough to shield them from a whopping 21% drop in profits compared to 2022, according to our pals at FactSet. Why? Well, it's all about those pesky deposit costs and loans playing hard to get. **Challenges in Credit Quality and Revenue Streams:** 1. Brace yourself—credit card mishaps and bad loans might be on the rise, especially for our friends with lower credit scores. 2. Investment banking revenue is feeling a bit meh due to fewer mergers, acquisitions, and initial public offerings. **Expense Control Measures:** Our buddy Sean Ryan from FactSet is like, "Watch out for banks tightening their belts!" They're talking layoffs and formal cost-cutting programs. Big banks are feeling the squeeze to save those pennies. **Impact of Falling Bond Yields:** 1. Even though the Federal Reserve is playing it cool with the lending rate, everyone's excited about rate cuts, pushing bond yields down. 2. But here's the kicker—deposit rates are a bit slow to catch up, causing some drama in the earnings department. **Net Interest Margins and Deposit Challenges:** 1. Net interest margins, the money-makers, are giving banks a run for their money despite falling bond yields. 2. Banks had to sweeten the deal with higher deposit rates after the chaos last spring, making those margins a bit of a rollercoaster. **Unrealized Losses and Deposit Attrition:** 1. U.S. bank deposits are doing a disappearing act, down by 6% since April 2022. Imagine trying to finance loan growth with a shrinking piggy bank! 2. Unrealized losses are like that annoying friend that just won't leave. They caused depositors to bail, making life difficult for banks, but hey, things might get better. **A Look at Bank Earnings:*$Bank of America(BAC)$ 1. Bank of America is in for a bit of a tumble—34% less in earnings, and net interest margin is taking a dip. 2. Citigroup and Wells Fargo might face some challenges, too, with credit loss provisions on the rise. **Conclusion:** Even the big player, JPMorgan Chase, is expecting a 4% earnings dip and a 7% increase in the credit loss provision. It's a bit like navigating a storm, but with higher interest rates on the horizon, there's hope. Get ready for some serious talks in those quarterly calls, and keep an eye out for banks doing their best to weather the storm with expense control magic. 🚀 @MillionaireTiger @TigerStars @Daily_Discussion This is just a view of caution in my opinion not an trading advice for buy or sell and crunching some numbers do feature me for sharing Subscribe to my trading sparks ⚡️ Like comment and share my post