OCT · ISSUE 42 · October 13, 2026
EARNINGSEarnings season opens, and the banks go first
Four big banks raise the curtain today. The market is paying twice the usual to get the reaction right.
REPORTING TODAY
4 banks
before the US open
IMPLIED MOVE
up to 5%
one-week options
USUAL REACTION
~2%
the day after
THE NUMBER
3.65-5%
the move options are pricing in
JPMorgan is priced for ~3.65%, Goldman ~4.27%, Citi ~4.15% and Wells Fargo ~5%. Well above the ~2% these banks typically move the day after reporting.
NUMBER
ZOOM IN5%
±5%
▲ ~2.5x the usual reaction (~2%)
It doesn't mean they'll fall 5%. It means the market rules out neither a big rally nor a big drop. Pure uncertainty.
Options price in up to a 5% swing in Wells Fargo. That's nearly triple its recent average reaction.
- ±
- — The move can go either way, up or down.
- VOLATILITY
- — How much the market expects a price to move.
QUOTE
AUTHORITYThe line that moves a bank isn't the profit
“In a bank, the headline profit matters less than two lines buried in the report: how much it earns by lending, and how much it sets aside in case it doesn't get paid back.”
The headline is earnings per share, but what moves the stock is usually another figure: the margin and the provisions.
- NIM
- — Net interest margin: what the bank earns on loans minus what it pays on deposits.
- PROVISIONS
- — Money the bank sets aside in case loans aren't repaid.
COMPARISON
IMPLIED MOVEWhat options pay for each bank
All above the usual 2%. BofA* reports tomorrow; the rest, today.
The taller the bar, the more uncertainty the market prices into that stock on earnings.
- OPTIONS
- — Contracts betting on a stock's move; their price reveals the expectation.
- THRESHOLD
- — The reference line: how much a bank usually moves the day after.
TWO MODELS
WHAT TO WATCHNot every bank makes money the same way
LENDING BANKS
JPMorgan, Wells Fargo, Citi
- They earn on the margin: lend high, pay little on deposits.
- They benefit when rates stay high for longer.
- Their risk is provisions: cards, commercial real estate, auto loans.
MARKET BANKS
Goldman Sachs, Morgan Stanley
- They live on trading and investment banking.
- They need IPOs, mergers and debt issuance.
- More volatile: a strong markets quarter sends profit soaring.
The same CPI or rates data hits each bank differently, depending on what it lives on.
- INVESTMENT BANKING
- — Advising on mergers and IPOs, and placing debt and equity.
- TRADING
- — Buying and selling assets for the bank and its clients.
EXAMPLE
WHERE IT COMES FROMWhere a big bank's revenue comes from
In most commercial banks, half the business is the margin. That's why the first line the market reads is rates.
This is an illustrative split, not any single bank's figures. It shows which line to watch.
- FEES
- — What the bank charges for services: accounts, cards, wealth management.
- MARGIN
- — The gap between what the bank earns and pays to lend.
CALENDAR
THIS WEEKWho reports and when this week
| TUE OCT 13 · pre-open | JPMORGAN, GOLDMAN, WELLS FARGO, CITI | High | They open the season. The credit tone sets the mood for the rest. |
| WED OCT 14 · pre-open | BANK OF AMERICA, MORGAN STANLEY, BLACKROCK | High | Second batch. Morgan Stanley brings the trading read. |
| WED OCT 14 · 8:30am ET | SEPTEMBER CPI | High | Macro data meets the banks: a heavy 48 hours. |
| THU OCT 15 · pre-open | SCHWAB, INTERACTIVE BROKERS | Medium | Brokers: a gauge of retail investor appetite. |
Four banks today and two tomorrow create concentrated, correlated risk windows, not six independent events.
- PRE-OPEN
- — Before Wall Street opens (9:30am ET).
- GUIDANCE
- — The company's outlook; sometimes it moves the stock more than the result.
WRAP
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- NIM
- — Net interest margin: the heart of a commercial bank's profit.
- EARNINGS
- — Quarterly earnings season.