CNBC
Stocks eked out a record close Monday, but gains were muted as Wall Street stayed cautious ahead of corporate earnings season. Citigroup was the first in a wave of Wall Street banks out with their second-quarter scorecards this week.
Citi topped analysts’ expectations for profit and revenue, helped by gains from the initial public offering of electronic bond trading platform Tradeweb, CNBC’s Hugh Son reports. Son will be watching some key themes as J.P. Morgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Wells Fargo are also expected to issue quarterly results in the coming days. One metric on his radar is Wall Street’s trading revenue — a key part of investment banks’ business that has been under pressure in recent quarters
In the case of Citi, trading revenue excluding the IPO windfall fell 5%, led by a 9% drop in equities trading revenue. Citi’s total investment banking revenue dropped 10% to $1.28 billion, Son reports. Investors and analysts will be watching to see if the retail banking side of their businesses can pick up the slack, and in the case of J.P. Morgan, produce another record quarter.
On calls with analysts, Son is expecting bank executives to face questions about the widely anticipated July interest rate cut by the Federal Reserve. Banks had benefited from a December rate hike. But the Fed’s dovish shift to lower interest rates could impact things like net interest income — the nuts and bolts of the banking business.
Kate Rooney | CNBC Markets Reporter
@Kr00ney
