It’s no secret that bank results this earnings season will be none too impressive, but 4 banks may actually be worse than feared.
That’s according to top Bernstein bank analyst Brad Hintz, widely followed in part because he was formerly the CFO at Lehman Brothers.
Hintz says the market already knows that fixed income has been lackluster and Europe is virtually dead. That will hit all banks and it’s priced in.
But the wildcard is going to be commodities.
“Commodities have been very, very slow this quarter,” says Hintz onCNBC'sFast Money Halftime Report. “The big commodity houses are going to underperform from a capital markets perspective. That’s JPMorgan, Barclays, Morgan Stanley and Goldman Sachs. Those are the banks that are most exposed to commodities. It’s not a pretty picture.”
On a related note in the wake of the LIBOR investigation, if you’re tempted to be greedy when others are fearful, Hintz says don’t be.
He’s done some proprietary research into the LIBOR investigation and tells us “a one basis point manipulation of LIBOR is worth roughly a $7 billion settlement. I’d avoid LIBOR banks all together.”
If you must put money to work in the space, Hintz says his favorite picks are ICE and CME.
* You can find our conversation with Hintz about 4 minutes into the video clip above.
Posted by CNBC's Lee Brodie
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Trader disclosure: On July 6, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long call spreads in AAPL; Jon Najarian is long call spreads in NFLX; Jon Najarian is long call spreads in KMI; Jon Najarian is long call spreads in AMZN; Jon Najarian is long CIGX; Jon Najarian is long GLUU; Jon Najarian is long CME; Jon Najarian is long CBOE; Pete Najarian is long AAPL; Pete Najarian is long AAPL CALLS; Pete Najarian is long C; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long NFLX CALLS; Pete Najarian is long NKE; Pete Najarian is long PCX CALLS; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long VLO; Steve Grasso is long XLU; Steve Grasso is long ZAZA; Mike Murphy is long INTC; Mike Murphy is long SBUX; Mike Murphy is long FB; Mike Murphy is long NKE; Mike Murphy is long LNG; Mike Murphy is long COG; Mike Murphy is long TOL; Mike Murphy is long LEN
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