All eyes on fourth quarter bank earnings


The fourth quarter earnings season has been generating lots of anxiety on Wall Street.

As CNBC notes, the "slowdown in earnings" was "a major theme for bears last year. Earnings had strengthened beginning in 2009, and were spectacular for 2010 and 2011, then growth began slowing, clocking in at a measly 2.4 percent for the third quarter. Fourth-quarter estimates, according to Capital IQ, are now at a mere 3.3 percent, as well…The key to earnings season are banks. Analysts are expecting a better than 10 percent increase in earnings."

Wells Fargo will get the party started on Friday with its fourth quarter report. JPMorgan, Goldman Sachs and U.S. Bancorp will report January 16, followed by Bank of America and Citigroup on January 17.

One huge issue of course is the effect of the bank settlement this week on fourth quarter results. Bank of America will see its earnings almost wiped out after reaching two settlements, but that may be seen as a net positive, as it might clear the way for the bank to finally put the mortgage mess behind it and reassert itself in critical markets.

"A mortgage repurchase settlement is a real positive for banks ... mortgage bank revenues in 2013 should be even higher than the healthy levels in 2012 once all the litigation and settlement costs are factored in," says CNBC.

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