Wall Street Braces for Q2 Earnings Reports

Receiving Wide Coverage ...

Headache du jour: This earnings season is all about lowering expectations. When JPMorgan kicks off the process on Thursday, the "big question" isn't about whether firms will meet or exceed projections. Instead, second-quarter results will help determine "whether bank stocks will be dead in the water for another year or two," according to the Wall Street Journal.

Appearing on CNBC's "Closing Bell," Sheila Bair, the former head of the Federal Deposit Insurance Corp., said Monday that banks are likely to look to trading revenues and added fees to prop up weak earnings elsewhere. "Longer term, hopefully we'll get back into a more normalized interest rate environment. I think longer term that provides for a more stable economy," she said. "But in the short term there's still going to be a lot of pain. You are going to see a lot more fees, probably."

Lackluster performance over the second half of the year will also take a bite out of year-end bonuses, reports Bloomberg.

Close scrutiny: Thomas Curry, comptroller of the currency, said Monday that his agency is watching out for weakening in the commercial real estate and auto-lending sectors. For American Banker's take, click here.Wall Street Journal, Financial Times

Wall Street Journal

Missed opportunity: Former Attorney General Eric Holder torpedoed an internal recommendation to pursue criminal charges against HSBC, according to a new report by House Republicans. The Justice Department instead settled with the bank for $1.9 billion in December 2012.

Challenging climate: Lending Club's charge-off rates have climbed 38% since 2013 – up to 6.31% from 4.58%. The uptick raises questions about how online lenders will continue to perform if the economy stalls.

Financial Times

Big money: Heads of the six biggest U.S. banks received an average of $20.7 million in compensation last year – a 10% raise over 2014. They're paid almost twice as much as their European counterparts.

Diversity push: Seventy-two financial firms in the U.K. – including banks, insurers and asset managers – have signed a "women in finance charter" that challenges the companies to tie executive pay to the number of women in senior roles. Morgan Stanley is the only Wall Street bank to sign up so far.

New York Times

Rising tide: Jamie Dimon announced in an op-ed Tuesday that JPMorgan Chase is raising the minimum wage for its employees, including bank tellers and customer service representatives, from $10.15 an hour to at least $12 an hour – and even higher in some geographic locations. The bank will also invest more than half a billion dollars in career training and education.