SPX, BAC, GS Analysis and Talking Points
- Goldman Sachs and Bank of America Provide Mixed Earnings
- Markets Price Out Expectations of a 100bps hike
Despite the volatile FX action with the USD breaking out to fresh record highs and US inflation rising to a whopping 9.1%, prompting markets to shift towards a 100bps hike. However, as Fed hawks maintain the view that 75bps is the base case, equity markets closed out last week on a firmer note, halving their weekly losses. This is quite noteworthy that equities have taken the recent news in its stride. That said, as I have stated previously, the bias remains to fade bear market rallies. This week sees a slew of major risk events from Europe, notably the Nord Stream decision, as well as the ECB meeting, where the focus is firmly fixed on the Anti-fragmentation tool. S&P 500 topside resistance is situated at 3945-50 and 4015 ahead.
Probability of a 100bps Hike Falls to 30%
Source: CME
S&P 500 Chart: Hourly Time Frame
Source: Refinitiv
BAC Q2 Results
- EPS $0.73 vs Exp. 0.75
- Revenue $22.79bln vs Exp. 22.86bln
- Trading Revenue $4.00bln vs Exp. 4.01bln
- IB Revenue $1.13bln vs Exp. 1.31bln
BAC shares are down 0.3% pre-market at the time of writing
GS Q2 Results
- EPS $7.73 vs Exp. 6.65
- Revenue $11.86bln vs Exp. 10.67bln
- Trading Revenue $6.47bln vs Exp. 5.82bln
- IB Revenue $1.79bln vs Exp. 1.88bln
GS shares are up 3% pre-market at the time of writing
US Earnings Calendar Highlight: Netflix, Tesla, Snap Inc, Twitter
Source: Refinitiv, DailyFX, Bloomberg
| Change in | Longs | Shorts | OI |
| Daily | 6% | -5% | 1% |
| Weekly | 7% | -10% | -2% |
