Big Banks Send Mixed Signals on Economic Outlook

Two more big banks provided updates on the fragile state of the economy on Friday, with one showing signs of trouble and the other managing to capitalize on conditions that are hurting its peers.

Wells Fargo reported its second-quarter earnings, revealing an increase in credit loss reserves, write-downs on investments and slowing home loan activity. Citigroup’s second-quarter report showed some of the same pressures, but it generated a much larger profit than analysts had expected, unlike Wells Fargo as well as JPMorgan Chase and Morgan Stanley, which released their latest financial results on Thursday.

“Nothing in the data that I see signals that the U.S. is on the cusp of recession,” Jane Fraser, Citi chief executive, told analysts on a conference call after the earnings. “While a recession could indeed take place, it is highly unlikely to be as severe as others we have seen.” The bank’s stock jumped more than 9 percent in early trading, outpacing gains at other banks, and was up more than 13 percent at the close.

Article source: https://www.nytimes.com/2022/07/15/business/wells-fargo-citigroup-earnings.html