News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Further your forex knowledge and gain insights from our expert analyst @ @MartinSEssex and @DColman on EUR with our free Q4 market analysis guide, available for free today.https://t.co/YwV249fojQ #Dailyfxguides https://t.co/BvfOW4QwZ9
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4Qi8ieG https://t.co/6cn6OK6M7w
  • RT @Stephanie_Link: 84% of $SPX companies have beaten EPS estimates to date for Q3, which is tied for the 3rd highest percentage since 2008…
  • What is #NFP and how can you trade it? Find out: https://t.co/XJWS04IF9j https://t.co/iV9lPzPDtc
  • What does it mean when one candle fully engulfs the previous in its price action? The bullish engulfing candle is one of the forex market?€?s most clear-cut price action signals. Figure out how to identify this pattern here: https://t.co/Yg6ecRZZNr https://t.co/3J0xXp4axT
  • Oil maintains a medium-term bullish outlook, but its overbought condition and price's proximity to key technical resistance may pave the way for a brief pullback before the next leg higher. Get your weekly oil forecast from @DColmanFX here: https://t.co/sv2bMc34gI https://t.co/DDIoe4VhZ3
  • It seems the markets are riding high, but risk is always lurking around the corner. Consider your escape plan before you find yourself in collapsing market. What are the top havens for different conditions in 2020? Find out from @JohnKicklighter here: https://t.co/1oeXWEsJkb https://t.co/P3SduerCFF
  • The update to the US GDP report may keep the Greenback under pressure as signs of a slowing recovery undermines speculation for an imminent shift in Fed policy. Get your weekly USD forecast from @DavidJSong here: https://t.co/xvLr1bLfZG https://t.co/aQnOIoUM9t
  • There a many different trading styles that can be applied to trading forex. Learn about different types of traders here: https://t.co/xfzRCzuuKK https://t.co/GXxdkNEeCg
  • Hang Seng Tech Index has likely formed a bullish “Inverse Head and Shoulders” chart pattern. Immediate support and resistance levels can be found at 5,800 and 7,433 respectively. Breaching above 7,433 would likely bring 8,266 into focus. https://t.co/VsavFLj97V
U.S. Banks Prepare to Kick Off Earnings: JPM to Set the Tone for XLF

U.S. Banks Prepare to Kick Off Earnings: JPM to Set the Tone for XLF

Diego Colman, Market Analyst

U.S. BANKS TALKING POINTS:

  • Major U.S. financial institutions will officially kick off the third quarter earnings season this week, with JPMorgan set to release results on Wednesday
  • Profits for big banks are likely to come down after spectacular windfalls in Q2, but the earnings outlook should remain constructive in response to the rising rates environment
  • Positive C-suite guidance may be a bullish catalyst for financials, boosting XLF over the medium term

Most read: Price Action Suggests Lower Levels for Gold and Silver

Investors will have a chance to assess the health of the equity market and its outlook when earnings season ramps up in earnest this week. The big banks will officially kick off the third quarter reporting period with JP Morgan unveiling results on Wednesday before the opening bell, followed by Bank of America, Citigroup, Wells Fargo and Morgan Stanley on Thursday, and Goldman Sachs on Friday.

The table below summarizes key earnings announcement dates and EPS expectations for some of the largest U.S. banks this week:

U.S. Banks Prepare to Kick Off Earnings: JPM to Set the Tone for XLF

Source: Yahoo Finance

After a spectacular performance in the second quarter, large-cap bank profits are expected to moderate, but should remain healthy and robust by historical standards, up 20% year-over-year, supported by consumer fees, wealth management fees and strong gains in the investment banking divisions on the back of record M&A activity. JPMorgan, Goldman Sachs, and Morgan Stanley, three dominant forces in this arena, are well positioned to benefit from the trend and may see their underwriting and advisory fees rise more than 20% year-over-year, an outcome that can boost their bottom lines, offsetting weakness in fixed income and equity trading volumes.

Focusing on thequarterly report cards, traders should scrutinize how the macroeconomic backdrop has influenced bank fundamentals in recent months and closely follow corporate guidance to estimate future earnings and adjust their expectations accordingly. Although pessimism has percolated through the market on signs of an economic slowdown, banks are likely to remain upbeat about lending activity amid faster loan demand growth and improving margins as bond yields begin to recover and the Treasury curve steepens.

One important thing to watch for should be the outlook for net interest income, which accounts for more than half of the banking industry revenue. If lenders show confidence that this metric will trend higher in coming months on a sustained basis as the Fed begins to tighten monetary policy and the economy transitions towards higher rates, megabank stocks could continue to fare well over the next few months. This would leave the financial XLF ETF in a good place to command strength and hit new record highs heading into the end of the year.

Check out the DailyFX economic calendar to make sure you don't miss any market-moving events

XLF TECHNICAL ANALYSIS

XLF has been trading inside the confines of an ascending channel since April and is now approaching the bullish pattern’s upper boundary near 39.25, a key resistance. If buyers manage to push price above this technical barrier, the ETF would be in uncharted territory, but it could potentially encounter resistance around 41.20, an upside target obtained by projecting half the height of the channel from the breakout point.

On the other hand, if sellers regain control of the market and XLF corrects lower, the first support to consider appears in the 37.50 area. Should price drop below this level, we could see a pullback towards the September low at 36.00

XLF TECHNICAL CHART

XLF Price Chart

Source: TradingView

EDUCATION TOOLS FOR TRADERS

---Written by Diego Colman, Contributor

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES