Earnings on Deck: JPMorgan Chase & Co., Wells Fargo & Co, and Bank of America Corp

JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), and Bank of America Corp (NYSE:BAC) are slated to report earnings this week

by Karee Venema

Published on Jul 13, 2015 at 11:00 AM
Updated on Jun 24, 2020 at 10:16 AM

Second-quarter earnings season unofficially got underway last week when aluminum giant Alcoa Inc (NYSE:AA) took its turn in the limelight. This week, financial firms will be in focus, with a number of notable names -- including JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), and Bank of America Corp (NYSE:BAC) -- stepping up to the mic. Here's a closer look at BAC, JPM, and WFC ahead of their respective results.

  • JPM is slated to unveil its quarterly report bright and early tomorrow morning. Ahead of the big event, the stock is up 1.4% at $67.97 -- thanks to well-received bailout news from Greece -- extending its year-over-year lead to 21%. Unlike Oppenheimer, option traders have been growing optimistic ahead of earnings, per JPM's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.57, which ranks in the 76th annual percentile. Looking back over the past eight quarters, JPMorgan Chase & Co. has averaged a single-session post-earnings move of 1.6%, and this time around, the options market is pricing in a bigger 2.5% swing -- based on the security's near-term at-the-money (ATM) straddle.

  • WFC will also report tomorrow morning, and the stock's near-term ATM straddle is calling for a 2.1% post-earnings move -- more than the 1% the security has averaged over the past eight quarters. On the charts, WFC has added 12.3% since hitting a year-to-date low of $50.42 in mid-January. What's more, the stock tagged a record high in late June, but was more recently seen lingering near $56.63. Option traders have been rolling the dice on a post-earnings dip, though, buying to open puts over calls at an accelerated pace in recent weeks. Specifically, Wells Fargo & Co's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.73 rests in the 62nd percentile of its annual range.

  • BAC is slated to step into the earnings spotlight Wednesday morning, and the stock's near-term options are pricing in lofty volatility expectations in the lead-up to the big event. Specifically, the security's 30-day ATM implied volatility of 23.2% currently ranks in the 77th percentile of its annual range. Meanwhile, over the past eight quarters, Bank of America Corp has averaged a 2.7% swing in the session subsequent to reporting -- slightly less than the 3% move the options market is expecting this time around (per BAC's short-term ATM straddle). In the options pits, long calls have been popular in recent weeks -- BAC's 10-day ISE/CBOE/PHLX call/put volume ratio of 4.63 ranks in the 66th annual percentile. Analysts have been upbeat, too, with 59% deeming the security a "buy" or better. Today, the stock is up 1.5% at $16.96, paring its year-to-date deficit to 5.2%.

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