Earnings Banks America Strong Party: Bank of America posted third quarter earnings results on Wednesday morning, and the results seem favorable.

The US bank has gained more than Wall Street expected by raising 1.5% in pre-trade stocks, extending the gains on Tuesday after good pairs were reported.

Bank of America (ticker: BAC) earned 56 cents on share earnings of $ 12.1 billion in net interest income. The expectation agreed on Wall Street was 54 cents and $ 12.2 billion, respectively. Interest rate differentials declined year after year, but this was not a surprise - interest rates have fallen worldwide over the last 12 months.

"In a moderate-growing economy, we focus on driving those things that are controllable," CEO Brian Moynihan said in a company press release. "The activity of our customers, the expansion of our customer base and our ability to gain market share in most of our businesses during the quarter reflect a responsible growth."

Credit metrics remained stable for the third quarter. Loan write-offs and delinquent loans decreased slightly sequentially. The bank ended the quarter with $ 2.4 trillion in assets and almost $ 1.4 trillion in consumer deposits. Bank of America claims the largest number of consumer deposits from any bank in the US UU

Earnings Banks America Strong Party

It is another solid result for investors. While investors are more concerned about the slowdown in the economy, it is so good for third quarter numbers so far, at least in the financial sector.

Banks often start their earnings reporting season. For scoring investors, JPMorgan Chase (JPM) and Citigroup (C) beat earnings estimates, while Wells Fargo (WFC) and Goldman Sachs (GS) fell short.

The four stocks traded higher on Tuesday. Better than expected results and poor ratings are two reasons for the evenly positive reactions. Banks are one of the least expensive sectors in the S&P 500 based on the price / earnings ratio. Bank of America shares, for example, are trading 10 times the estimated earnings of 2020 per share.

Goldman Sachs' failure was partly due to bitter investments in Uber Technologies (Uber) and WeWork. Goldman Sachs, of course, is a key financial institution in the EE. But it is an investment bank and it is not directly comparable to commercial banks which do the vast majority of lending business with American savers and companies.

Bank of America shares have climbed more than 20% so far this year, better than the Dow Jones Industrial Average's comparable earnings.

The bank holds a conference call for investors and analysts at 8:30 p.m. to discuss the results.

Charles Schwab shares have risen. There is a price war, but the gains were strong.

 Charles Schwab shares jumped about 5% as their recent gains showed the discount brokerage firm continues to move forward despite a price war that has nullified commissions on share trading. .

Earnings per share were higher than expected, interest income was weaker than expected, and assets growth under management was healthy. The stock traded up about $ 39.67 on Tuesday afternoon.

Schwab (ticker: SCHW) said it gained 70 cents per share in the quarter, beating the consensus estimate of 64 cents. The company reported revenue of $ 2.71 billion, up 5% from $ 258 billion a year ago.

The background story. Shares of Schwab and other discount brokers fell in recent weeks as they announced that the stock trading commissions would be eliminated. Fidelity joined the party without a commission last week, leaving Vanguard as the only major discount broker to continue to collect commissions for US stock trading.

Schwab's revenue from trade has been declining for months, and this quarter was no different. The company reported a gain in trading volume for the quarter, but total revenue from trading declined 2% from $ 172 million from the previous year as its operating income declined.

The trade represents 6% of Schwab's total revenue. However, investors are worried that the loss of revenue in this area will come at a difficult time for the company and for the industry as a whole. The rise in interest rates increased the income and profits of the stock exchanges, which benefit from reinvesting cash in clients' brokerage accounts in Treasury debt and other securities, but revenue stream is under pressure as the Fed lowers rates.

So far, he does not appear to be harming Schwab seriously. Schwab reported net interest income of $ 1.63 billion in the third quarter, up from $ 1.61 billion in the second quarter. Schwab also reported a slightly higher net interest margin due in part to adjustments to its combination of assets that generate interest and higher margins on mortgage-backed securities.

Other areas of his business seem to be holding well. Schwab reported asset management revenue of $ 825 million, up 5% from the previous quarter and 2% higher than in the same period last year. Schwab said the earnings came from "growing client balances" in money market funds, consulting fees and revenue from third-party and publicly traded mutual funds.