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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bullish
USD/JPY
Bearish
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
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • Why do you require consistency in trading and why does it matter? Find out: https://t.co/f4y1FOOZnM #tradingstyle https://t.co/x5HgYopWc5
  • The USD may rise if the FOMC re-affirms its data-dependent approach and cools 2020 rate cut bets. US retail sales and CPI data may also give the Fed impetus to hold rates. Get your $USD market update from @ZabelinDimitri here: https://t.co/XnDITaDOox https://t.co/A480uVMqF2
  • What tools does the ECB have left to stimulate the Eurozone? Where is the #Euro heading? Find out from Chief Eurozone Economist at Pantheon Macroeconomics Claus Vistesen only on Trading Global Markets Decoded #podcast hosted by @MartinSEssex here:https://t.co/Twr44cZ1GB https://t.co/DXlDH5Cp9e
  • The price of oil extends the advance from the October low as #OPEC and its allies pledge to take additional steps to balance the energy market. Get your crude #oil market update from @DavidJSong here: https://t.co/llGq8yPFH4 #OOTT https://t.co/1OCVOIrK98
  • Gold closed lower after paring early-week gains post-NFP on Friday. But will price finally break support? These are levels that matter on the XAU/USD weekly chart. Get your gold technical analysis from @MBForex here: https://t.co/ovGheRg4MQ https://t.co/ZEQSYktj0w
  • What is your #tradingstyle? Take the quiz and let us know: https://t.co/LPBOcS0Vtd https://t.co/l6FvtcADEH
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia from @DavidCottleFX here: https://t.co/E2hqoRdO7q https://t.co/dnrAMFK4U2
  • Geopolitical developments send #oil prices soaring or falling. Get your market update from @MartinSEssex here:https://t.co/XVXLyG8vjq #OOTT https://t.co/RMk5Eb5fLU
  • Negative yielding government bonds – What are they telling us? Find out from @nickcawley1 here: https://t.co/F6JuhmrvPT https://t.co/KdpSjQSJ8F
  • #Euro area stocks may be preparing to break the four-month uptrend built around hopes for a US-China trade deal and an orderly #Brexit outcome. Get your market update from @IlyaSpivak here: https://t.co/ujlCJiXLvh https://t.co/INdFtsrTTF
S&P 500, Dow Rebound as Q3 Earnings Season Kicks off with Banks

S&P 500, Dow Rebound as Q3 Earnings Season Kicks off with Banks

2018-10-12 17:00:00
Peter Hanks, Junior Analyst
Share:

Talking Points:

  • In general, bank stocks gapped higher at the open as they looked to regain ground lost in the week
  • Many of the banks see continued growth in the near future, despite October’s tumultuous start
  • Earnings season continues next week with BAC, MS, GS, and FANG’s leading component

Third quarter earnings kicked off in earnest this week with big banks being some of the first corporations to deliver. JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) were among them. After two brutal trading days in which the SPDR XLF Financial Select Selector ETF dropped 6%, it gapped higher Friday. Despite the generally positive earnings, XLF traded lower as Friday pressed on and investors further digested the reports and the broader indices surrendered some gains.

SPDR XLF Financial Select Selector ETF Hourly, October

S&P 500, Dow Rebound as Q3 Earnings Season Kicks off with Banks

See how our clients are positioned on different assets and currency pairs with IG Client Sentiment.

JPMorgan Chase

JPMorgan offered the most impressive performance, surpassing all expectations. Earnings per share jumped to $2.34 versus the expected $2.25. Revenue came in at $27.8 billion, topping the $27.5 billion expectation. The figures resulted in a 33% increase in EPS and a 5% increase in revenue for the nation’s largest bank by assets.

Please add a description for the image.Please add a description for the image.

Executives highlighted rising interest rates, a robust US economy, and rising consumer credit as contributors to the stellar quarter. Moving forward, CEO Jamie Dimon saw reason for continued US economic strength and remained optimistic despite October’s volatility. Shares of JPM were part of the broader market rally, but likely enjoyed an extra bump because of the positive results.

Citigroup

Citigroup delivered mixed results for the third quarter with an 18% increase in EPS to $1.73 versus 1.67 expected. Revenue missed forecasts, reading $18.39 billion versus $18.43 expected. Despite the mixed results, shares of Citigroup traded firmly in the green Friday. As of the morning hours, they traded up 3.7% around $71.

Please add a description for the image.Please add a description for the image.

Wells Fargo

Despite various headwinds and scandals that have recently plagued WFC, earnings were mixed as EPS beat and revenue missed slightly. EPS climbed 12.5% from last quarter to $1.17. Revenue dipped 0.1% to $21.9 billion. In a statement, CFO John Shrewsberry highlighted increased debit and credit card usage, higher year-over-year loan originations in auto, small business, home equity, and personal loans as some of the strong performers of the quarter.

Please add a description for the image.Please add a description for the image.

Broader Takeaways

In general, the performance of the big banks was encouraging. The forecasted data for upcoming quarters highlights the position the financial institutions find themselves in. A strong economy coupled with rising interest rates provides a friendly landscape for lucrative loans. Should interest rates rise too much, margins drop and forecasts would show the signs. The current and upcoming climate is arguably a goldilocks scenario.

Bank earnings are often used as bellwethers for upcoming earnings in the broader market. That said, a string of reports near forecasted levels are a promising sign despite the volatility US equities have experienced this week. Next week Bank of America (BAC), Morgan Stanley (MS), and Goldman Sachs (GS) are due to report.

What is the NASDAQ FANG Group and Why Does it Matter?

The first of the FANG members, Netflix (NFLX) is also due. FANG will similarly be looked to gauge the quarter. The four high-growth tech stocks have been a source of robust growth in the bull-run we find ourselves in. Should they show signs of slowing, it will certainly weigh on sentiment.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Other Top Stories:

Trade Wars and Tariffs: The Impact on Europe, EUR, GBP & Stocks – By Martin Essex, Analyst

US Dollar Eyes Key Level, GBP and EUR Dip - US Market Open – By Justin McQueen, Analyst

US Dollar Bounces from 95.00, Global Stocks Attempt to Build Support – By James Stanley, Currency Strategist

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

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

DISCLOSURES

News & Analysis at your fingertips.