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.

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
EUR/USD
Bullish
Oil - US Crude
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
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • What's the difference between leading and lagging indicators? Find out from here: https://t.co/vGx8HCagF5 https://t.co/4DGXwA8vqs
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/mAMhWbV6Jy
  • Make smart trading decisions with your free guide to trade the news. Download your free guide here.https://t.co/pb5E2KgRzW #DailyFXGuides https://t.co/E9ZmJvqO0z
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/fqxw1AoKc1
  • Gold snapped a two-week losing streak but keeps price within the broader August downtrend. These are the levels that matter on the $XAUUSD weekly chart. Get your market update from @MBForex here: https://t.co/B3Jct6mIBD https://t.co/xTGIM2hRBv
  • $GBPUSD continues to move higher, despite Friday’s weakness, as vaccination hopes continue to fuel positive sentiment despite ongoing lockdown fears and downbeat UK data. Get your market update from @nickcawley1 here: https://t.co/S8UoHzOwFN https://t.co/qI6UZdggvM
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/6wxX6oQurn
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/w009tJEQZn
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/2AeO1AdD2M
  • 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/INJz4NSugQ
S&P 500 Finishes Higher as Bank Earnings Underwhelm Start to Earnings Season

S&P 500 Finishes Higher as Bank Earnings Underwhelm Start to Earnings Season

Thomas Westwater, Contributor

S&P 500 CLIMBS AS BANK EARNINGS SHOW ANTICIPATION FOR HEAVY LOAN LOSSES AHEAD TALKING POINTS:

  • JPMorgan and Wells Fargo increase reserve builds as the banks expect a rough economic recovery
  • The S&P 500 Index climbs higher despite the weak earnings from JPM and WFC
  • IMF economic outlook for 2020 shows a 3 percent contraction for global growth

The S&P 500 Index finished well in the green Tuesday as earnings season kicked off with two of the largest banks in the United States reporting Q1 earnings this morning. JP Morgan Chase printed earnings of $0.78 per share, missing estimates of $2.49. Wells Fargo also missed with EPS of $0.01 versus estimates of $0.61 per share. JP Morgan and Wells Fargo ended the trading session -2.74% and -3.98% respectively.

S&P 500 INDEX (5-MIN CHART)

SP500 Bank earnings

Source: IG Charts

Despite the weak prints, US equity markets are now well above their March lows as central banks and fiscal policymakers have enacted record breaking stimulus into the economy. New York’s recent decline in virus deaths may also be supplying further fuel for equities as NY Governor Cuomo said ‘the worst is over’ on Monday as fatalities appear to be declining in the hard-hit state.

Equities Forecast
Equities Forecast
Recommended by Thomas Westwater
Get Your Free Equities Forecast
Get My Guide

While signs may be appearing for a peak in the virus pandemic, the fallout to the economy is likely to persist through the year according to two of the largest banks in the United States. Chase reported a 69 percent decline in net income as they increased reserve levels by $6.8 billion for a predicted sharp uptick in credit losses. Wells Fargo also increased its reserves in anticipation for economic distress in the months ahead, with a $3.1 billion build in its reserve levels.

S&P 500 VERSUS JPM AND WFC (2-HOUR CHART)

Q1 bank earnings versus Spx

Created by Thomas Westwater in TradingView

Adding to the calls for economic fallout to continue through the rest of the year, the IMF released its world economic outlook this morning,forecasting the deepest global recession since the great depression of the 1930’s. The Great Lockdown, as the IMF terms it, is expected to put a serious hit on global growth for the current year forecasting a 3 percent contraction, 6.3 percent lower than the last forecast from the organization.

Going forward, banks may see a rough path to recovery versus other sectors of the economy with less exposure to the expectedly harsh economic conditions ahead. Recent actions from the Federal Reserve may also drag on the banking sector altogether, with interest rates near zero. This, combined with the loss on loans going forward, presents somewhat of a double-edged sword to banks, which normally see higher profits in periods where interest rates are high.

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

DISCLOSURES