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Banks beat to kick-off US earnings season; US500 at 3-week high


  • JP Morgan, Wells Fargo and Citigroup all beat earnings estimates
  • The 3 banks kick-off earnings season in earnest
  • US500 moves to 3-week high; threatening to break out to the upside

The latest earnings releases from 3 large US banks has seen the earnings season for Wall Street begin in earnest on a positive note with all 3 posting pleasing results. JP Morgan recorded a 35% jump in profit thanks to a combination of lower taxes and rising interest rates. The US’s largest bank by assets beat the street in reporting earnings per share (EPS) of $2.37 on revenues of $27.9B - compared to consensus forecasts of $2.28 for EPS and $27.71 for revenue. The stock is expected open strongly this afternoon with pre-market trade showing a move higher. 

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 JP Morgan ended Thursday at its highest level in over 3 weeks. There could be more upside ahead after the latest strong earnings release. Source: xStation 

Wells Fargo also delivered a strong set of results with their EPS for the first quarter coming in at $1.12 versus a $.06 consensus estimate. In terms of revenue there was more good news with turnover of $21.93B compared to $21.73 forecast. Similarly the stock is expected to open higher with shares in demand during the pre-market trade. 

Finally, Citigroup completed the hat-trick of beats with EPS of $1.68 vs $1.61 expected. Again quarterly revenues rose, albeit only marginally above the street’s forecasts of $18.86B in coming in at $18.87B. This marks an increase of 3% on the $18.37B revenue seen for the same period a year ago.  

Unsurprisingly the rise in the shares in the pre-market is boosting wider indices with the US500 trading at its highest level in 3 weeks ahead of the US cash open. During yesterday’s post we identified 3 potential resistance levels for the US500, with the first two of these already being broken and the 3rd (at 2678) now being tested. A clean move and weekly close above 2678 would be undoubtedly positive for this market and may be seen to trigger a break of the neckline in an inverse head and shoulders formation. Should this play out in a textbook fashion then it would target a larger move higher to above 2800 (2805 if we assume 2678 is the neckline.)  

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 The US500 may be breaking the neckline in a potential inverse S-H-S setup. This would target a larger move higher to 2805. Source: xStation



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