US Banks Brace for Earnings Season Amid Rising Interest Rates

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US Banks Brace for Earnings Season Amid Rising Interest Rates
Credit: © Reuters.

The upcoming U.S. earnings season, set to kick off this week, is expected to significantly influence equity markets over the next month. Prominent banks, including JPMorgan Chase & Co. (NYSE: JPM ), Citigroup (NYSE: C ), and PNC Financial Services Group (NYSE: PNC ), are preparing to announce their quarterly earnings on Friday. The banking sector's performance will be a focal point of interest as analysts anticipate decreased profits for all U.S. banks, except JPMorgan Chase & Co., according to Angela Barnes from IGTV.

Scott Krisiloff, a finance expert who recently appeared on Yahoo Finance Live, highlighted the importance of closely monitoring interest-rate sensitive sectors. This comes amid rising long-term interest rates and their potential impact on these sectors and the mortgage industry. Despite the concerns, Krisiloff assuaged fears of an ongoing financial crisis, particularly those arising from long-duration asset securities portfolios within banking institutions.

In addition to the banking sector, PepsiCo (NASDAQ: PEP ) is scheduled to report its quarterly results on Wednesday. The company is expected to outperform expectations despite the current high inflation environment. However, PepsiCo's stock has experienced a 14% drop from its yearly peak due to consumers shifting towards more cost-effective brands and concerns over the company's high debt-to-cash flow ratio.

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