So bank earnings season kicked off today. How are things going?

The largest U.S. banks signaled that the worst of the coronavirus recession is yet to come, opting… collectively stockpile $28 billion to cover losses as consumers and businesses start to default on their loans.

O… K….

JPMorgan Chase… posted a profit of $4.69 billion, down from $9.65 billion a year earlier….

“This is not a normal recession,” Mr. Dimon said. “The recessionary part of this you’re going to see down the road.”

We see.

Citigroup Inc on Tuesday posted a 73% plunge in quarterly profit… “We are in a completely unpredictable environment... The pandemic has a grip on the economy, and it doesn’t seem likely to loosen until vaccines are widely available,” Citigroup Chief Executive Officer Michael Corbat said on an earnings call….

So far Citi, the third largest credit card issuer in the United States, has offered forbearance on 2 million credit card accounts representing 6% of balances, the bank said.

Wells Fargo suffered a loss of $2.4 billion during the second quarter, a sharp reversal from the $6.2 billion the lender earned a year ago. The bank lost 66 cents per share, more than three times as much as feared. It's Wells Fargo's first loss since late 2008 during the height of the financial crisis…. "Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter," Scharf said

That all sounds bad. Is it actually worse?

Underlying the banks’ relative resilience in the second quarter were some arguably temporary benefits that don’t really address the long-term economic risks…. Meanwhile, there are signs that risks are spreading beyond consumers. Second-quarter reserve builds for wholesale and commercial lending went up far more than they did for consumer loans across the three banks. Plus, companies are borrowing less. Commercial and industrial lending at JPMorgan was down 7% from the first quarter, despite the jump in Paycheck Protection Program loans.

Cool, cool. Great. So, uh, again, we ask, how are things going?

The Dow Jones Industrial Average gained 248 points, or 1%, at 26,335, while S&P 500 was up 7 points at 3,162, a gain of 0.2%, as energy shares and materials shares rallied…. After a wild ride in equities on Monday, investors parsed earnings reports from some of the nation’s largest banks that offered some insights about the outlook for the domestic economy that has been ravaged by the coronavirus pandemic.

Did they really, though?

‘This Is Not a Normal Recession’: Banks Ready for Wave of Defaults [WSJ]
Banks Are Fine, but the Economy Ins’t [WSJ]
JPMorgan Sets Aside More Than $10 Billion to Cover Coronavirus Loan Losses [WSJ]
Trading gains shield Citi as bad loan provisions surge [Reuters]
Wells Fargo lost $2.4 billion last quarter, setting the stage for its first dividend cut since the Great Recession [CNN Business]
Dow up 250 points at midday Tuesday, Nasdaq down after briefly flipping positive [MarketWatch]