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Here's What to Expect From Wall Street's 'Ugly' First-Quarter Earnings

JPMorgan Chase (JPM - Get Report) , Citigroup (C - Get Report) and other U.S. banks, already reeling from a surge in oil-industry loan defaults, now face shrinking returns from trading and investment-banking as volatile markets push clients to the sidelines.

First-quarter trading revenue at the largest U.S. banks probably plunged by an average 25% from a year earlier, according to brokerage firm Keefe, Bruyette & Woods. Fees from advising on mergers and stock- and bond-underwriting likely tumbled 11%. JPMorgan, the biggest U.S. bank, is due to post results on April 13, with Bank of America (BAC - Get Report) , Wells Fargo (WFC - Get Report) , Citigroup, Morgan Stanley (MS - Get Report) and Goldman Sachs (GS) reporting over the following week.

Markets have gyrated this year as investors agonized over China's currency stability, U.S. monetary policy and Japan's surprise decision to cut interest rates below zero. As a result, companies refrained from pursuing initial public offerings or selling debt during a period that is usually one of the strongest of the year, hitting Wall Street in its most profitable businesses.

"It was an ugly quarter," said Mike Mayo, a bank analyst at CLSA. "It almost seemed like there was nostalgia for the financial crisis."

Trading revenue probably slid 20% at JPMorgan, with 15% declines at...