Bank shares are expected to be closely watched as JPMorgan Chase, Wells Fargo, and Citigroup prepare to release their latest quarterly earnings on Friday. So far this year, JPMorgan has seen a gain of 8.7%, while Wells Fargo has experienced a decline of 3.8% and Citigroup has dropped by over 8%. In contrast, the SPDR S&P Bank ETF (KBE) has faced a loss of nearly 20% due to higher interest rates and slowing loan demand. The upcoming earnings reports may influence the stocks’ performance during the session.
According to Ed Yardeni, a strong third-quarter earnings season could potentially set the stage for a year-end rally in the markets. Yardeni Research’s founder believes that after a downturn in the second quarter, earnings are poised for recovery in the third quarter. He also suggests that mega-cap tech companies could be a good investment, as they have less debt and are therefore less susceptible to interest rate risks. Yardeni believes that tech stocks could serve as a safe haven in an environment of higher interest rates.
Dollar General’s stock rallied nearly 8% in after-hours trading following the announcement of former CEO Todd Vasos’ reinstatement. Vasos will resume his role immediately, replacing Jeff Owen. Under Owen’s leadership, the company experienced declining sales growth and faced criticism for its unsafe working conditions. Additionally, Dollar General lowered its full-year profit guidance, now expecting earnings of about $7.10 to $7.60 per share compared to previous forecasts of $7.10 to $8.30 per share. Vasos’ return is seen as an effort to boost slowing sales growth.
So essentially, bank stocks are anticipated to be impacted by the upcoming quarterly earnings reports, with JPMorgan, Wells Fargo, and Citigroup all experiencing different performances this year. Ed Yardeni believes that the third-quarter earnings season could lead to a market rally and suggests that tech stocks could be a good investment due to their lower debt exposure. Dollar General’s stock saw a significant increase after the company announced the reinstatement of its former CEO, Todd Vasos. The company has been facing declining sales growth and lowered its full-year profit guidance.
