COVID-19

Banks earnings expected to reflect an economy that is reopening

Mitchell Hartman Apr 13, 2021
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With unemployment still high, however, it’s hard for some households to make their monthly payments on credit cards, auto and home loans, said Greg McBride at Bankrate.com. Justin Sullivan/Getty Images
COVID-19

Banks earnings expected to reflect an economy that is reopening

Mitchell Hartman Apr 13, 2021
Heard on:
With unemployment still high, however, it’s hard for some households to make their monthly payments on credit cards, auto and home loans, said Greg McBride at Bankrate.com. Justin Sullivan/Getty Images
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Spring corporate earnings season kicks off this week with a lot of reports from big banks, starting Wednesday with JPMorgan Chase, Wells Fargo and Goldman Sachs. Last year, there was a lot of worry about bank earnings as the economy went into a tailspin from the COVID-19 pandemic. But now, for the start of 2021, things are looking at lot rosier.

For starters, financial markets are riding high, and Karen Petrou at Federal Financial Analytics said that’s where banks make a lot of their money. Stocks have soared, companies are going public, “tech firms are launching new offerings, there’s a lot of fee income in that,” Petrou said. “And even the most risky borrowers are being supported in the corporate sector by ultra-low interest rates.

A robust, reopening economy will help banks earn more going forward, said Greg McBride at Bankrate.com, though he said with unemployment still high, it’s hard for some households to make their monthly payments on credit cards, auto and home loans.

“It’s going to take a while longer for households that suffered income disruptions to get to their new normal, before we really get a sense of the extent of consumer defaults, delinquencies, bankruptcies and foreclosures,” McBride said.

He said government relief checks have helped mitigate consumers’ debt troubles in the pandemic.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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