Skip to content

XTB TRADEBEAT

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

Summary:

  • 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. 

link do file download link

 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.)  

link do file download link

 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

 

Disclaimer

This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk, we do not accept liability for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.