News of the Week (January 12 - 16, 2026)
Photo by Jakub Dziubak / Unsplash

News of the Week (January 12 - 16, 2026)

20 min read

Table of Contents

In case you missed it, I published a Taiwan Semi earnings review during the week and an updated view of my portfolio and performance (exited a core position).

1. Big Bank Earnings

Important Credit Lingo:

  • “Provisions” are a company's funds set aside to cover their best estimate of future credit losses based on observed economic conditions. This is the leading indicator for credit health.
    • Provisions are usually based on the current expected credit loss (CECL) framework.
  • Delinquencies are loans that are past due by a certain number of days (30-90 day and 90+ day are common). This will lag provisions and lead charge-offs.
    • A non-performing loan (NPL) rate measures the portion of outstanding credit more than 90 days delinquent or past due.
  • Net charge-offs are loans that a creditor decides won’t be repaid and will instead become losses. Net charge-off (NCO) rate is the percentage of loans classified as uncollectible. This is the lagging credit indicator.
  • Reserve levels refer to the amount of funds set aside to cover potential losses for the overall portfolio. Reserves and Provisions are correlated.
    • Higher expected delinquencies and NCOs contribute to reserve building.
  • If a company decides future losses could rise, they will raise Provisions. If they’re right, delinquencies will eventually rise. If that credit isn’t repaid, charge-offs (losses) will eventually rise.

a. JP Morgan

Results:

Revenue missed estimates by 0.9%. It also missed $4.91 EPS estimates by $0.28 and exactly met 2.54% net interest margin (NIM) expectations. Finally, it missed 1.20% return on asset (ROA) estimates by 6 basis points.

Credit Data:

Outlook & Call Commentary:

The charge-off rates look pretty good. Things are mostly stable on a sequential basis and improved Y/Y (which excludes seasonality). The same is true for delinquency rate data (typically a meaningful Q3 to Q4 step-up in auto delinquencies). So with that in mind, and based on the positive economic commentary below, why did provisions sharply spike higher? What are they seeing? In a word, Apple. The company had to add $2.2B in front-loaded provisions to add the Apple Card portfolio to its balance sheet. Portfolio growth also led to provisioning growth. Excluding that Apple item, which is entirely based on accounting regulation and not concern over Apple Card repayment trends, provision levels look great.

And for 2026, they see card services net charge-off rate remaining wonderfully resilient. This is expected to come in at 3.40% vs. 3.31% Y/Y and 3.34% two years ago. Great stability in their outlook, which is supported by the optimism in the call quotes below:

"Consumers and small businesses remain resilient. We continue to monitor leading indicators for any signs of stress. And despite weak consumer sentiment, trends in our data are largely consistent with historical norms and we are not currently seeing deterioration. Across income groups, debit and credit sales volume continued to perform well, up 7% year-on-year. " – CFO Jeremy Barnum 
"Oveer the next 6 months and even a year, the backdrop is pretty positive. Consumers have money. There's still jobs, even though things have weakened a little bit. There is a lot of stimulus coming. Deregulation is a plus in general... I do think the rising tide is lifting all boats a little bit… Geopolitics carries a big amount of risk...deficits are large... but we're comfortable we can build our business." – CEO Jamie Dimon

b. Bank of America

Results:

Bank of America beat revenue estimates by 2%, beat $0.96 EPS estimates by $0.02 and beat 2.00% net interest margin (NIM) estimates by 8 bps.

Credit Data:

Outlook & Call Commentary:

Just like JP Morgan, the data below looks quite resilient. Delinquency and NPL data looks solid on a sequential basis and a bit more solid on a Y/Y basis. NCO data looks good, and provisions (without JPM’s Apple headwind) were also good. There’s nothing at all alarming in this data or in the company commentary.

“It was a pretty good environment as we moved through 2025. Consumer spending grew 5%. Account balances for that broad base of U.S. consumers were stable through the year. Delinquencies and charge-offs improved in 2025 for consumer credit. Unemployment in the market remains stable… This strong consumer health bodes well for the continued improvement in growth in 2026.” – CEO Brian Moynihan
“For corporate commercial customers, they had a good profit year as the tax law settled in, the tariffs appeared to be manageable and deregulation kicked in. They had good credit quality and good money movement activity as we moved through the year. Our world-class research team has the global growth rate for GDP at 3.4% in 2026 and U.S. at 2.6%.” – CEO Brian Moynihan

Moynihan responding to an analyst pushing back against their rosy 2026 outlook:

“Is there a parade of horrible things that you can start rattling off? Yes. But you sat there and asked last year too. Those same dimensions were in place 2 years ago, 3 years ago, 4 years ago. What we see differently is the momentum in the market, the AI capital markets activity and the consumer spending is 150 basis points higher than it was back then in our customer base. Credit losses are among the lowest in our history going back 50 years. These are good setups, but we're always worried about what could happen next, as you say, and that's why we did the stress testing.” – CEO Brian Moynihan
“Provision expense in the quarter was $1.3 billion and mostly matched net charge-offs. Focusing on total net charge-offs looking forward in the near term, we expect continued stability in total net charge-offs, given the mostly benign consumer delinquency trends and low unemployment data, the continued stability of C&I and reductions in our commercial real estate exposures… in addition to the consumer delinquency statistics, note the modest changes in other stats for both our consumer and commercial portfolios.” – CFO Alastair Borthwick

c. More Commentary from Around the Sector

“Credit performance remains strong… Consumers continue to be resilient as income growth has generally kept pace with increases in inflation and debt levels. Our nonperforming asset ratio declined modestly from a year ago and increased 3 basis points from the third quarter driven by higher commercial real estate and commercial and industrial nonaccrual loans. The drivers of this increase were borrower specific, and we did not see any signs of systemic weakness across the portfolio… at this point, what we're seeing in what's happening across the consumer base is just very consistent activity. “ – Wells Fargo CFO Michael Santomassimo
“The global economy has powered through many shocks over the past few years, creating optimism and confidence that economic growth is poised to continue. With inflation now at normal levels globally, almost every central bank is becoming more accommodating. And while the labor market in the U.S. has softened, capital investment remains strong, especially in tech. And it's the combination of that CapEx, the health of the consumer, the tax bill benefits and anticipated rate cuts that should be enough to sustain growth.” – Citi CEO Jane Fraser
“It's worth noting that across our U.S. cards portfolios, delinquency and NCL rates continue to perform in line with our expectations.” – Citi CEO Jane Fraser

The data and commentary were quite positive across the board. It’s easy and data-driven to feel optimistic about 2026 economic health, but we must stay laser-focused on unemployment trends to see if that rains on the parade. Not happening yet. Will keep obsessively monitoring. For now, the backdrop is constructive and supportive of strong 2026 growth.

2. Software Selloff & AI Disruption Risks