Wall Street will say that ‘greed’ is back, but I think the better description is resolve. After stumbling in March, the market continues to find ways to move higher, especially on days when it opens lower. So, while ‘fear’ isn’t as high as it was a year ago, there is no way ‘greed’ is the invisible hand at work.

Yesterday was another example of resolve kicking in. Major indices slumped at the opening bell, but buyers emerged with an hour remaining in the session.

The gains weren’t impressive, but it’s hard to ignore there is demand for stocks on weakness. Yep, buy the ‘dip is back’ – big time.

• S&P 500 (SPX) +0.33%
• Nasdaq-100 (NDX) +0.06%
• Russell 2000 (RUT) +1.22%
• Nasdaq Composite (IXIC) +0.28%
• West Texas Intermediate (WTI) -2.05%
• CBOE 10 Year Treasury (TNX) +1.96%
• CBOE Volatility Index (VIX) -0.70%

Marching Higher Since March

The interesting part of the market is what worked yesterday fails today, and what failed yesterday might lead the way today. \

Focus on Banks and Netflix

Banks rebounded as there was only one loser in the batch yesterday. Big names report today, including Bank of New York Mellon (BK), Bank of America (BAC), and Goldman Sachs (GS).

Although banks act better, the KBW Bank Index (BKX) is languishing near recent lows.

All eyes will be on Netflix (NFLX) when it reports after the bell today. 

Focus in Google

Suddenly, Google (GOOGL) is at risk of being pushed off its pedestal.  Despite all the advantages and resources, the company was caught flat-footed on Artificial Intelligence (AI), and now rumblings that Microsoft (MSFT) is poised to seize the moment are gaining credence. 

This is a wild story, and it’s hard to believe any company could become that complacent.

In addition to earnings reports, the economic calendar picks up as well.

Portfolio Approach

We took profits in a position in Materials in our Hotline Model Portfolio. If you are not a current subscriber to our premium Hotline service, email your account representative or Info@wstreet.com to get started today. 

Today’s Session

The market is higher this morning, boosted by bank and investment bank earnings. Bank of America (BAC) is higher after beating consensus on top and bottom line.

BAC Results

• Earnings per share $0.97; consensus $0.81
• Revenues $26.3 billion; consensus $25.3 billion
• Trading revenue $5.05 billion; consensus $4.46 billion
• FICC $3.43 billion; consensus $2.62 billion
• Net Interest Income $14.58 billion; consensus $14.42 billion
• Provisions for Credit Losses $931 million vs. $30 million last year
• Average credit card outstanding balance $91.8 billion vs. $78.4 last year

Some of the bullish sentiment this morning was dented following Goldman Sachs results, which came lighter-than-expected. A $470 million hit from its Marcus loans dragged down the first quarter’s revenues.

• Earnings per share $8.79; consensus $8.24
• Revenue $12.22 billion; consensus $12.83 billion
• Loans $178 billion vs $179 billion in Q4 while deposits were $375 billion from $387 billion in Q4
• Asset under supervision rose $125B during Q1 to a record $2.67 trillion
• Provision for credit losses -$171 million vs. $561 million last year 

Earnings results are proving to be resilient, as the Street focuses on how companies are holding up amid rising interest rates and persistent inflation.

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.