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Ready For Bank Earnings?

Expect banks to be under the microscope again Friday, as JPMorgan kicks off bank earnings.

Investors will be combing JPMorgan results for signs that loan demand could return this year and that the banks have finished putting aside money against future losses.

“How quickly can they get the provisions down and what does credit look like? What does consumer credit look like? That’s really important,” says Karen Finerman.

“I think JPMorgan gives us a look at how quickly credit quality issues can be repaired,” she adds.

Analysts on average expect JPMorgan, seen as one of the best survivors of the credit crisis, to report fourth-quarter earnings of 61 cents a share according to Thomson Reuters.

JPMorgan's Ripple

JPMorgan earnigns are widely seen as a barometer for other big banks, especially Wells Fargo and Bank of America both of which report on Wednesday.

Wells Fargo is expected to report a 2 cent loss per share, while Bank of America is expected to post a 52 cent loss per share.

Large regional banks such as U.S. Bancorp and PNC Financial Services are expected to follow national banks in reporting that, while loan losses eased in the fourth quarter, the U.S. economy has not quite emerged from the severe recession and financial crisis.

And there could be some upside surprises too such as dividend raises. However we're not out of the woods entirely.

Speculation is growing that some banks still have loan losses lurking in their books after Societe Generale issued a profit warning following write-down for risky assets.

The Trades

I’m long JPMorgan into earnings, reveals Joe Terranova. I’m bullish.

I can’t forget that Meredith Whitney’s estimates on JPMorgan are much lower than the Street, reminds Guy Adami. If she’s right-- and so far she’s been right -- JPMorgan stock isn’t as cheap as it appears.

I added to my Bank of America position on Thursday, explains Karen Finerman. JPMorgan earnings will likely move BAC.

I’m keeping Wells Fargo on my radar, adds Pete Najarian. It’s performing well in a down tape and performing well in an up tape. That’s impressive.

If Wells Fargo hits $30 I’d sell it short, counters Adami.

I'm also watching Goldman, adds Pete Najarian. If it breaks below $165 that's very concerning.


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Trader disclosure: On January 14th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Pete Najarian Owns (AMAT) Calls; Pete Najarian Owns (CLF), Is Short (CLF) Calls; Pete Najarian Owns (HUM) Call Spread; Pete Najarian Owns (INTC) Call Spread; Pete Najarian Owns (MS); Pete Najarian Owns (PFE); Pete Najarian Owns (QCOM) Calls; Pete Najarian Owns (TCK), Is Short (TCK) Calls; Pete Najarian Owns (TXT) Call Spread; Pete Najarian Owns (XLF) Calls; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Is Short (IYR), (MDY), (IWM), (USO), (UNG), (TLT), (BCR); Finerman Owns (AAPL); Finerman's Firm And Finerman Own (CVS); Finerman's Firm Owns (MSFT), (TGT), (WMT); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman's Firm And Finerman Own (GOOG); Terranova Is Long March British Pound Futures; Terranova is Long Copper Backwardation Futures: Long May 2010, Short July 2010; Terranova Owns (QCOM), (MSFT), (EMC), (FCX), (JPM), (FTO), (XOM), (BAC); Terranova Is Short (CMA), (JCI), (CAL), (ESS), (AGU), (ICE); Terranova Owns (POT) Feb. Puts; Terranova Owns (XHB) March Puts

For Joe Terranova:
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Moshe Orenbuch:
(JPM) Is Or In Past 12 Months Was A Client Of Credit Suisse
Credit Suisse Provided Investment Banking Services To (JPM) In Past 12 Months
Credit Suisse Provided Non-Invetment Banking Services To (JPM) In Past 12 Months
Credit Suisse Has Managed Or Co-Managed A Public Offering Of Securities For (JPM) In Past 12 Months
Credit Suisse Has Received Investment Banking Compensation From (JPM) In Past 12 Months
Credit Suisse Expects To Receive/Seek Investment Banking Compensatoin From (JPM) In Next 3 Months
Credit Suisse Has Received Non-Investment Banking Compensation From (JPM) In Past 12 Month

For Mike Khouw:
Cantor Fitzgerald & Co. Is A Market Maker In (INTC)
Cantor Fitzgerald & Co. Is A Market Maker In (TXN)
Cantor Fitzgerald & Co. Is A Market Maker In (AMAT)


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