Here’s what investors should focus on when JPMorgan and Citigroup kick off bank earnings Friday

Key Points
  • JPMorgan kicks off fourth-quarter earnings season for big banks on Friday at about 7 a.m., followed by releases from Wells Fargo and Citigroup.
  • Earnings expectations for the fourth quarter have been on the rise, thanks to climbing interest rates and expectations for solid trading and investment banking results.
  • The biggest U.S. banks (with the exception of Wells Fargo) all saw per-share earnings estimates jump by at least 8% in the past month, according to Barclays analyst Jason Goldberg.
Jamie Dimon, chief executive officer of JPMorgan Chase & Co., speaks during a House Financial Services Committee hearing in Washington, D.C., U.S., on Wednesday, April 10, 2019.
Andrew Harrer | Bloomberg | Getty Images

Bank stocks have staged a fierce comeback from the lows of 2020, when investors feared that pandemic-related loan losses and low interest rates would squeeze the industry.

After being one of the least-loved sectors during most of last year, the KBW Bank Index and lenders including JPMorgan Chase and Goldman Sachs are all up at least 11% in 2021.

Feeding into the momentum, analysts have turned bullish on the industry, hiking price targets on the anticipation that vaccines will allow for a reopening of the U.S. economy, while coming rounds of government stimulus will prop up borrowers, ultimately allowing banks to release some of the tens of billions of dollars set aside last year for loan losses.