Big banks show clean credit, but investors fear what comes next

Wall Street's biggest banks reported no sign of credit strain in the third quarter, but shares of JPMorgan Chase and Citigroup fell Tuesday as investors looked ahead to long-end yields rising faster than short-term yields, a pattern that typically precedes higher credit risk. Provisions for credit losses fell 19% from a year ago to $2.74 billion, and net charge-offs of $2.2 billion were down more than $300 million. Analysts were more measured on earnings: Jefferies called JPMorgan's quarter mixed, with fixed income revenue below estimates, while Goldman Sachs beat on investment banking and Citigroup was rated positive, with net interest income of $16.98 billion and a 12% dividend increase to $0.67. Morgan Stanley, Bank of America and BlackRock report Wednesday morning.

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