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Markets continued their steady march into the green for another trading day, in what is shaping up to be the strongest week of trading in the past month or so. The Dow nudged along, relatively minimally, +46 points, +0.14%, while the S&P 500 outperformed measurably, +0.85%. The small-cap Russell 2000 did even better than that, +0.91%, while the Nasdaq once again took the cake for the session, +219 points or +1.58%.
Steadily cooling inflation metrics combined with still-healthy jobs numbers have helped market participants get their arms around a “soft landing” scenario: the Fed’s aggressive — but not too aggressive — interest rate hikes since March of last year have so far managed to take out 40+-year highs on inflation without nose-diving the economy into recession. Perhaps we’re a tad long in the tooth with this bullish scenario, and it might be if you’ve just now woken up to the idea that the Fed will land this plane softly, you may be a little late to the party.
That said, we’ve got the thick of earnings season dead ahead: this morning’s beat-and-raise from PepsiCo (PEP - Free Report) joins Delta’s (DAL - Free Report) similarly stellar Q2 report yesterday now give way to the big banks, whose performance may be a touch more problematic: higher interest rates have hurt business in the banking space generally, though demand for housing despite higher mortgage rates may provide a bright spot tomorrow morning.
JPMorgan Chase (JPM - Free Report) is among those big banks reporting Q2 earnings Friday, with +31% earnings year over year on +21% in revenues expected. The financial giant is currently riding a three-quarter winning streak on earnings beats, with a trailing 4-quarter average beat of +9%. The stock also rides a Zacks Rank #2 (Buy) into the print, though its Value-Growth-Momentum score is mired at F right now.
Similarly for Citigroup (C - Free Report) , another of the Wall Street banking majors out with Q2 earnings Friday morning: it too carries an F for Value-Growth-Momentum, but is otherwise a Zacks Rank #3 (Hold)-rated stock. Also like JPMorgan, Citi is looking for its 4th positive surprise in its last 5 quarters. But expectations are for -43% in earnings year over year and -1.4% on revenues. On the other hand, perhaps these numbers will be easier to beat in the report.
Wells Fargo (WFC - Free Report) is the third major bank reporting tomorrow, and while it is not at the same size as Chase or Citi, it does come with a B on Value-Growth-Momentum and a Zacks Rank #3. Like JPMorgan, analysts expect big year-over-year numbers: +55% on earnings, +19% on revenues. Wells looks for its 4th-straight earnings beat; it’s trailing 4-quarter average is +7%.
Image: Shutterstock
Markets Keep Strong Ahead of Big Bank Q2 Earnings
Markets continued their steady march into the green for another trading day, in what is shaping up to be the strongest week of trading in the past month or so. The Dow nudged along, relatively minimally, +46 points, +0.14%, while the S&P 500 outperformed measurably, +0.85%. The small-cap Russell 2000 did even better than that, +0.91%, while the Nasdaq once again took the cake for the session, +219 points or +1.58%.
Steadily cooling inflation metrics combined with still-healthy jobs numbers have helped market participants get their arms around a “soft landing” scenario: the Fed’s aggressive — but not too aggressive — interest rate hikes since March of last year have so far managed to take out 40+-year highs on inflation without nose-diving the economy into recession. Perhaps we’re a tad long in the tooth with this bullish scenario, and it might be if you’ve just now woken up to the idea that the Fed will land this plane softly, you may be a little late to the party.
That said, we’ve got the thick of earnings season dead ahead: this morning’s beat-and-raise from PepsiCo (PEP - Free Report) joins Delta’s (DAL - Free Report) similarly stellar Q2 report yesterday now give way to the big banks, whose performance may be a touch more problematic: higher interest rates have hurt business in the banking space generally, though demand for housing despite higher mortgage rates may provide a bright spot tomorrow morning.
JPMorgan Chase (JPM - Free Report) is among those big banks reporting Q2 earnings Friday, with +31% earnings year over year on +21% in revenues expected. The financial giant is currently riding a three-quarter winning streak on earnings beats, with a trailing 4-quarter average beat of +9%. The stock also rides a Zacks Rank #2 (Buy) into the print, though its Value-Growth-Momentum score is mired at F right now.
Similarly for Citigroup (C - Free Report) , another of the Wall Street banking majors out with Q2 earnings Friday morning: it too carries an F for Value-Growth-Momentum, but is otherwise a Zacks Rank #3 (Hold)-rated stock. Also like JPMorgan, Citi is looking for its 4th positive surprise in its last 5 quarters. But expectations are for -43% in earnings year over year and -1.4% on revenues. On the other hand, perhaps these numbers will be easier to beat in the report.
Wells Fargo (WFC - Free Report) is the third major bank reporting tomorrow, and while it is not at the same size as Chase or Citi, it does come with a B on Value-Growth-Momentum and a Zacks Rank #3. Like JPMorgan, analysts expect big year-over-year numbers: +55% on earnings, +19% on revenues. Wells looks for its 4th-straight earnings beat; it’s trailing 4-quarter average is +7%.
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