GettyImages-51619057
When major banks kick off earnings season this week — led by JPMorgan and Bank of America — investors should expect to see a lot of red. DOUG KANTER/AFP/Getty Images

New York got some unseasonably cold weather this weekend. But the chill will last even longer on Wall Street, where major banks begin reporting earnings in the week ahead after a long and painful quarter.

“It certainly has been a dramatic and volatile first quarter,” Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management, said. “There’s been a sharp reduction in expectations in financials.”

Between turbulent equity markets, a drought in initial public offerings and continued losses stemming from the beleaguered energy and commodities sectors, Wall Street is projected to report one of its most disappointing first quarters in the last decade, with revenue growth at almost every major bank expected to turn negative.

Market plunges in the first two months of the year weighed heavily on banks, with equity markets and commodities prices tumbling amid fears over global growth prospects. Financial stresses in February mounted to levels not seen since late 2011.

Big bank trading desks were slammed as investors sat out on what's usually Wall Street’s strongest quarter, when hedge funds and asset managers strategize investments for the coming year. Revenue from stock-market trading fell 13 percent combined at Bank of America, Citigroup, JPMorgan and Morgan Stanley, analysts at Goldman Sachs projected, while trading in debt and currencies dropped an average 15 percent.

The pain at trading desks extended to investment banking divisions, which saw a global drought in corporate deals. The volume of initial public offerings plunged 74 percent, according to Dealogic, while aggregate mergers and acquisitions slipped 20 percent to $750 billion, compared with the first quarter of 2015.

Underlying all the volatility and trepidation is a broadly slowing global economy shot through with diminishing inflation expectations, a combination of factors that crimps what banks can earn in ordinary lending.

Wiegand predicts that bank earnings beginning this week will continue the unease investors have felt since January. “To start earnings season with financials probably won’t cause a really positive outlook,” Wiegand said, noting that the bank sector is third behind energy and commodities in the list of sectors that have dropped the most this year. “We’re not likely to get the all-clear sign.”

JPMorgan Chase & Co.

JPMorgan Chase & Co. (NYSE:JPM), which reports Wednesday, April 13, before markets open, has warned that its quarterly results won’t be pretty. In February, investment banking chief Daniel Pinto projected a 25 percent drop in revenue in his division, driven by lower fees raised in underwriting debt and equities offerings.

“There is no doubt that so far it has been a very tough quarter,” Pinto said, estimating that sales and trading revenue at the nation’s largest bank by assets would drop an expected 20 percent.

But JPMorgan stock has recovered from a low hit on Feb. 11 — the day Chief Executive Jamie Dimon bought up $26 million of JPMorgan shares because, as he later recalled, “I had a morning where I wasn’t doing anything.” Analysts also remain confident in JPMorgan, with 30 of the 32 analysts covering the bank recommending a hold or buy.

Analysts surveyed by Thomson Reuters expect JPMorgan to report earnings per share of $1.26, a 4.5 percent drop from the $1.32 reported in the fourth quarter of 2015.

Bank of America Corp.

Like JPMorgan, Bank of America (NYSE:BAC) is expected to post dour earnings when it reports before the opening bell Thursday, April 14. Analysts see the bank’s earnings falling 24 percent, to 22 cents per share. The company’s stock price was down 23 percent from the start of the year at the close of trading Friday.

Among the lenders reporting next week, Bank of America is projected to take the largest hit in investment banking revenue, with Goldman Sachs analysts predicting a 20 percent decline from the year before in that division. The Charlotte-based lender has reportedly readied a round of layoffs in its investment banking unit exceeding the usual 5 percent trim in payrolls.

Bank of America could also emerge as a leader in another unenviable category: exposure to energy loan losses. At $21.3 billion, the bank’s loans to oil and gas companies could prove a drag on earnings, as the bank absorbs energy debts amid continued weakness in oil prices.

Wells Fargo & Co.

When Wall Street hits a rainy patch, things sometimes look a little brighter on the West Coast. But the San Francisco-based Wells Fargo (NYSE:WFC), whose business model rests more on consumer and business lending than high finance, is also predicted to see a slight drop in the first quarter, with earnings per share sliding 5 percent to 98 cents.

In the fourth quarter of 2015, Wells Fargo reported $90 million in additional losses to its energy loan portfolio, a trend that was likely to continue as energy prices continued ailing in the first months of 2016. Executives emphasized that oil and gas loans made up only 2 percent of the bank’s portfolio.

Shares in Wells Fargo have drooped since late March 24, when analysts at Swiss bank UBS released a report rating the bank a sell, arguing that its reputation as a safe, buttoned-up lender overlooked risky loans to subprime auto borrowers and indebted companies.

Wells Fargo is scheduled to report earnings Thursday, April 14, at 10 a.m. EDT.

Citigroup

Citigroup (NYSE:C) has been among the banks trying to prepare investors for an earnings dip. Last month, Chief Financial Officer John Gerspach said that revenue from fixed-income trading was expected to fall 15 percent in the first three months of the year. Gerspach projected investment banking revenue to drop 25 percent compared with the same quarter last year.

Analysts see Citigroup’s revenue falling 11 percent compared with the first quarter of 2015, the fourth consecutive first-quarter decline for the nation’s fourth-largest lender. Citigroup stock experienced the second-largest decline among major banks in 2016, down 22 percent from the start of the year.

“It’s been a tough first quarter,” Gerspach said. Citigroup is scheduled to report its first-quarter earnings Friday, April 15, at 8 a.m. EDT.