Wake Up Wall Street (SPY) (QQQ): Banks go boom and not in a good way


Here is what you need to know on Friday, January 14:

Bank stocks just went boom and not in a good way. As predicted by us in our large preview note here, we saw earnings coming in ahead of estimates but the stock prices falling back on those earnings.

Why? First, the beat was priced in. Look at the performance so far of financials for the year. It is better to travel than arrive. Second, some nice reserve releases are adding to the boost in bank profits. However, it is not all doom and gloom for banks. The Fed was increasingly hawkish yesterday in its commentary, something that should serve to underpin financial stocks this year. Indeed, this sell off may present a nice entry opportunity. We remain overweight financials for the year relative to other sectors. Goldman Sachs (GS) is up on Monday, and we can usually expect the master of the universe to deliver. 

Markets are fearful though with the Nasdaq taking a pounding yesterday on no news. Many are saying the Fed has turned increasingly hawkish, but fed funds futures were already pricing in near 90% certainty of a March hike before equities sold off on Thursday. The retail sales number just out is not going to help sentiment as the number misses by quite a leap: -1.9% monthly versus -0.1% forecast.

The dollar is where the big money is at, and this had already signaled that risk was off (the real reason for the equity slide) as it slumped in the second half of the week to 1.1450 now versus the euro. Equity markets have been propelled to current heights by risk assets, the likes of Tesla (TSLA), etc. When the rally has been so narrowly concentrated, it is no surprise that risk aversion leads to large losses. Bitcoin is back to $42,000, and oil is holding at $82.10. Gold is steady at $1,827. Yields actually fell yesterday despite the hawkish Fed comments.

See Forex Today

European markets are lower: Eurostoxx -0.2%, FTSE -0.1% and Dax -1%.

US futures are lower too: S&P and Dow are both -0.6%, while the Nasdaq is -0.7%.

Wall Street (QQQ) (SPY) Stocks News

US retail sales -1.9% versus -0.1% forecast. Core -2.3% versus 0.1% forecast. 

ECB Lagarde says inflation to moderate later this year.

Citigroup (C) beats on top and bottom lines, but stock falls 4%.

Wells Fargo (WFC) beats on top and bottom lines but stock flat.

JPMorgan (JPM) beats on EPS, but revenue miss hits stock, now down 4% premarket.

Las Vegas Sands (LVS) up 9% on report of new laws in Macau. MGM up 4%.

Pfizer (PFE), BioNTech (BNTX), Moderna (MRNA): Pfizer down 2% premarket, Moderna and BioNTech down 4% as US Supreme Court blocked Biden's vaccine or test mandate and officials question if Omicron boosters are needed.

BlackRock (BLK) missed on revenue, but EPS ahead.

Sherwin Williams (SHW) down 3% on cutting forecasts.

Boston Beer (SAM) cut earnings outlook, down 8% premarket.

Upgrades and Downgrades

Source: Benzinga Pro

Economic releases

 

 


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD rebounds to 1.1350 on modest dollar weakness

EUR/USD regained its traction after declining toward 1.1320 during the European session and rose to 1.1350 area. The dollar's is facing modest selling pressure amid falling US Treasury bond yields and allowing the pair to continue to edge higher ahead of the weekend.

EUR/USD News

GBP/USD struggles to pull away from 10-day low set near 1.3550

GBP/USD fell toward 1.3550 on Friday and touched its weakest level in 10 days. Although the US Dollar Index stays in the negative territory in the early American session, the risk-averse market environment doesn't allow the pair to stage a convincing recovery.

GBP/USD News

Gold reclaims $1,840 amid falling US T-bond yields

Gold reversed its direction after testing $1,830 earlier in the day and turned positive on the day above $1,840. The benchmark 10-year US Treasury bond yield is losing more than 3% at 1.75%, fueling XAU/USD's rebound.

Gold News

BTC may capitulate to $30,000

Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

Read more

Will the Netflix stock price rebound?

Netflix stock edged down after better than expected Q4 results. Will the Netflix stock price rebound? Expectations of rising subscription and higher prices are bullish for Netflix stock price.

Read more

Forex MAJORS

Cryptocurrencies

Signatures