Citigroup (C) will announce its second quarter earnings results before the US market opened on Tuesday, July 14, which is the quarter that has been severely affected by the Covid-19 outbreak. In order to stimulate and restore the US economy, in March the Fed cut interest rates down to 0.25%, which directly affected all banking and financial business income. Today’s earnings report, comprised of the major bank groups, might show the outcomes of this policy.
For Citigroup, the latest forecast from Zacks is that Citigroup earnings per share in the second quarter should be $0.55 per share, down from the first quarter at $1.05 per share in the same quarter last year. At $1.95 per private share, the second-quarter sales forecast is $18.86 billion, down from the previous quarter’s sales of 26.378 billion (net revenue of 2.522 billion). Zacks ranked Citigroup shares in Quarter 2 at level 3 (of 5), which represents “ on hold” recommendation for investors.
It should be noted that expenses in the first quarter were $17.62 billion, which increased significantly from 2019 (Q4 2019: $12.67 billion, Q3 2019: $12.55 billion, Q2 2019: $12.59 billion).
The Revenue factor for card spending should be clearly affected by the outbreak of the coronavirus and the lockdowns that followed and resulted in the halting of almost all economic activities, especially in the tourism industry.
However, most recently, Citigroup has expanded its partnership with the world’s leading asset management company BlackRock. Through BlackRock’s Aladdin network, the technological advantage of fund management for Citigroup clients will be increased.
“Connecting with service providers like Aladdin to our data integration and delivery framework, clarity is a continuation of our commitment to delivering valuable data and analysis. That will help customers reduce operating costs,” said Fiona Horsewill, head of digital strategy and data strategy for Citi fund management and services.
From a technical perspective, the price of Citigroup continues to recover. On Friday, the price rose away from the 50-day SMA line and remain above $52.00 so far this week . Yesterday, Citigroup fell -0.85% to close at $52.20, with MACD still in the positive territory. The support level remains at the 50-day SMA line, which is the same area as the low zone of July, at the price zone $49.00, with the first Resistance at $55.60 and the main Resistance at the 200-day SMA line and the 4-month high zone at $62.00.
With all this, there is still a potential second wave of the coronavirus in the background. The number of people infected around the world is now at 12.7 million and the statistics continue to increase.
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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand
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