After the failure of two large banks in the United States and a government-supported rescue of Credit Suisse in March, fears of contagion across the banking sector gripped markets. However, the first round of bank earnings last week broadly beat estimates, helping to allay some of those fears.1 The largest banks, such as JPMorgan Chase and Citigroup, were the immediate beneficiaries of depositors fleeing smaller banks, due to their perceived safety.
The bigger test for the banking sector is likely to come this week from a slew of regional bank earnings being released Thursday, including those for KeyCorp, Fifth Third Bancorp and Truist Financial.2 Any signs of depositor flight and new provisions for credit losses from the regional banks will be closely watched by investors.
After important labor market and inflation data were released during the previous two weeks, this week’s economic calendar is relatively light. Fresh data on the housing market is the highlight, with housing starts due to be released on Tuesday and existing home sales information coming out Thursday.3
1CNBC – JPMorgan Chase posts record revenue on higher interest rates; shares jump 7%; 4/14/2023
2Kiplinger – Kiplinger's Weekly Earnings Calendar (April 17-21); 4/14/2023
3MarketWatch – U.S. Economic Calendar; as of 4/17/2023
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