Investors are keeping a close eye on the financials with both Morgan Stanley and Wells Fargo scheduled to reports earnings on Wednesday.
Analysts believe Morgan Stanley likely broke a string of three straight losses in the third quarter, while Wells is expected to follow its big bank peers in reporting more loan losses, but how much more is the big question.
What should you know?
Wells is considered one of the stronger, more conservatively managed large banks. But investors are still worried about credit quality in the loan portfolio it acquired as part of its purchase of Wachovia last fall.
JPMorgan, Citigroup and BofA rattled investors last week when their results showed that loan losses remain high, which means consumers and businesses are still having trouble paying off their debts.
The losses at JPMorgan and Citigroup, however, were offset by robust trading activity. Though Wells Fargo has a smaller trading operation than some of its big-bank counterparts, the bank has had much success in growing its mortgage banking business.
Income generated from mortgage banking more than doubled in the second quarter from the prior-year period.