Bove Says Bank Earnings Next Week Will Be 'Terrible'
Appearing on CNBC's The Call, Rochdale's Dick Bove just painted a quite concerning picture for the remaining banks which have not yet issued their Q2 results.
Bove said that results from JPMorgan (NYSE: JPM) and Goldman Sachs (NYSE: GS) gave investors a false sense of hope. He admitted that while he liked the Goldman report, JPMorgan had "no earnings", essentially implying that they finagled their way to a profit in Q2 (although Bove didn't use such a term). Bove continued by predicting that "next week we're gonna see terrible earnings out of every bank that reports." Bove said he thinks 50% of them will report that they lost money during the quarter. Yikes.
While next week's earnings reports will mostly come from regional banks, there are several notables that will be reporting next week: Wells Fargo (NYSE: WFC), Morgan Stanley (NYSE: MS), State Street (NYSE: STT), Bank of New York Mellon (NYSE: BK), US Bancorp (NYSE: USB) Fifth Third (Nasdaq: FITB) and KeyCorp (NYSE: KEY).
Still, when Melissa Francis asked Bove if he would get out of bank stocks, the analyst replied with a stern "No." Bove believes that traders are no longer valuing banks based on their capital levels, but, rather, said the argument is now focused on what normalized earnings from these banks will be.
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