Goldman Beat and Still Dropped 3%. Here's What the Other Five Banks Need to Prove This Week.
Goldman posted record equities revenue and a 6.6% EPS beat. The stock fell anyway. JPMorgan, Citi, BofA, Morgan Stanley, and Wells Fargo report Tuesday and Wednesday into a $104 oil shock.
Goldman Beat Expectations. Why Didn’t the Market Care?
Bank earnings week is here, and the first result already surprised the market. Goldman Sachs reported Q1 2026 earnings this morning: $17.55 per share, beating the $16.47 consensus by 6.6%. Revenue hit $17.23 billion, up 14% year over year.
Return on equity came in at 19.8%. The stock fell 3% in pre-market trading.
Why? Because the headline numbers masked a split personality. Goldman’s equities trading desk posted a record $5.33 billion in revenue, up 27%, powered by an all-time high of $2.61 billion in equities financing from prime brokerage lending.
Meanwhile, FICC revenue dropped 10% to $4.01 billion, missing the StreetAccount estimate by $910 million. Rates, mortgages, and credit all underperformed. Commodities and currencies couldn’t offset the weakness.
That divergence is the template for the entire week. As we noted in our Q1 earnings season preview, the market is no longer rewarding “beat.” It is looking through Q1 numbers and asking a harder question: what does your guidance say about the next two quarters?
Tuesday’s Triple Header: JPMorgan, Wells Fargo, and Citigroup
Three of the six largest U.S. banks report on April 14. Each faces a different test.
JPMorgan: The Consumer Credit Question
Wall Street expects JPMorgan to earn $5.32 to $5.50 per share, roughly 7% above last year, on revenue near $48.5 to $49.1 billion. Full-year net interest income guidance sits at roughly $104.5 billion. The trading desks should deliver. JPMorgan’s FICC operation alone is projected at $6.78 billion, up 16% year over year, and equities should mirror Goldman’s strength.
The real issue is the consumer book. Credit card delinquencies are at a 12-year high of 3.3%, and net charge-off rates are climbing toward 3.4%. If those numbers cross 4%, the credit loss provisions could eat into whatever the trading desks earn.
Jamie Dimon isn’t hiding from it. In his April 6 shareholder letter, he warned of “very high” asset prices, drew parallels to the 1974 and 1982 oil-shock recessions, and flagged the possibility of core PCE bouncing back to 3.5% by mid-year. When Dimon starts referencing the 1970s, the credit provisions he’s building deserve a close look.
Wells Fargo: Post-Asset-Cap, Now What?
Consensus has Wells Fargo at $1.57 to $1.58 per share, up 23.6% year over year, on revenue of $21.73 billion. The asset cap came off in mid-2025 and assets have grown 11% since. Full-year NII guidance is around $50 billion.
The question: can that 11% asset growth translate to NII growth, or is the rate tailwind fading? So far, the answer has been mixed. NII guidance disappointed relative to peers, and there is no committed timeline for the 17-to-18% return-on-tangible-common-equity target that investors want to see. Watch the NII revision more than the Q1 print.
Citigroup: The “Prove It” Quarter
Analysts expect Citigroup to post $2.63 to $2.65 per share, up 34% year over year, on revenue near $23.5 to $23.7 billion. CEO Jane Fraser has confirmed mid-teens growth in both investment banking fees and markets revenue. Full-year targets include 10-to-11% return on tangible common equity and a 60% efficiency ratio.
This is the quarter where the three-year “One Citi” transformation has to show real earnings leverage, not just expense cuts. Treasury and Trade Solutions and the investment bank are the two engines. Seeking Alpha’s preview frames Citi as the more defensive stock if the Hormuz situation drags on. That positioning only holds if revenue growth backs it up.
Wednesday’s Dual Report: Bank of America and Morgan Stanley
Bank of America: The NII Durability Test
Consensus has BofA at roughly $1.00 per share, up 11.3%, on revenue near $29.96 billion. Management guided NII to grow 5 to 7% in 2026, based on two rate cuts that haven’t materialized.
The paradox: the oil shock has kept inflation elevated, which prevents the Fed from cutting (we covered the rate outlook here), which in turn supports NII durability. Higher-for-longer rates are good for net interest income. But those same conditions raise credit risk on the consumer side.
The credit card charge-off trajectory is the landmine to watch. BofA has been pitching a “fee machine” pivot. Wednesday we’ll see if it’s real.
Morgan Stanley: Can Wealth Management Carry the Quarter?
Analysts project $3.01 to $3.08 per share for Morgan Stanley, up 16 to 18.5%, on revenue near $19.7 to $19.9 billion. The wealth management franchise posted $8.4 billion in net revenue last quarter, and UBS upgraded the stock to Buy with a $196 price target on April 7.
The question for Morgan Stanley is whether equities trading can match Goldman’s record or whether FICC will disappoint here too. Goldman’s FICC miss was the single biggest reason for its stock decline. If Morgan Stanley shows the same split, in our view the market is likely to treat it the same way.
What Are the Three Questions That Actually Matter?
The individual bank numbers will fill the headlines. But the investor takeaways this week boil down to three things:
1. Is the credit cycle turning? Watch provision builds and charge-off commentary across all six reports. Credit card delinquencies at 3.3% are elevated, but manageable. If charge-offs cross 4%, the narrative shifts from “strong quarter” to “credit deterioration.”
2. Can the M&A pipeline survive the Hormuz shock? Goldman’s investment banking fees surged 48% to $2.84 billion, but CEO David Solomon noted IPO activity slowed in March due to Middle East tensions. Global M&A volume hit $1.38 trillion in Q1 with $3 trillion in private equity dry powder behind it. Watch what CEOs say about the Q2 pipeline, not the Q1 actuals.
3. What does “higher for longer, again” mean for H2? The Fed is stuck at 3.50 to 3.75% with core PCE at 2.7% and oil at $104. Policymakers project one cut in H2 2026, one more in 2027. Jerome Powell’s term expires May 15, adding another layer of uncertainty. NII guidance revisions and rate sensitivity commentary will tell the story.
What Should Investors Watch This Bank Earnings Week?
| Bank | Reports | Consensus EPS | YoY Growth | The One Metric to Watch |
|---|---|---|---|---|
| Goldman Sachs | April 13 (done) | $17.55 (actual) | +14% rev., 6.6% EPS beat | FICC miss set the template |
| JPMorgan | April 14 | $5.32-$5.50 | +7% | Consumer credit provisions |
| Wells Fargo | April 14 | $1.57-$1.58 | +23.6% | NII guidance revision |
| Citigroup | April 14 | $2.63-$2.65 | +34% | Efficiency ratio progress |
| Bank of America | April 15 | $1.00-$1.01 | +11.3% | Credit card charge-offs |
| Morgan Stanley | April 15 | $3.01-$3.08 | +16-18.5% | Equities vs. FICC split |
Combined trading revenue for the six largest banks is tracking near $40 billion for Q1. Equities alone are projected at roughly $18 billion for the top five, more than double a decade ago.
The Strait of Hormuz blockade collapsed transit volume by 94%, a story we covered in depth in our Hormuz blockade analysis. Goldman called it the largest oil supply shock in recorded history. That volatility is the engine behind these numbers.
The S&P 500 is tracking 12.6% earnings growth for Q1, down from 13.4% a week ago. Only 4% of the index has reported, but early results show 80% EPS beats and 90% revenue beats. Banks will set the tone for the rest of the season.
We believe the guidance matters more than the prints this week. In our view, the market has already priced in strong trading revenue. What it hasn’t priced in is a credit cycle that may be turning while the Fed sits on its hands.
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