Bank stocks had rallied ahead of the start of the fourth-quarter earnings season, on favorable trends in Treasury yields and market expectations of the Fed.
The pullback in stocks following the quarterly releases looked like a news sell-type development. But some of these quarterly banking releases have also raised legitimate concerns. For example, cost outlooks provided by JPMorgan JPM and Goldman Sachs GS were above consensus estimates, but we did not see this issue with Bank of America (BAC) and Morgan Stanley MS.
This suggests that the cost problem at JPMorgan, Goldman Sachs and a few others may be the result of company-specific factors.
The issue of cost will be key across industries in this reporting cycle, as it will determine both short-term and long-term margin trends.
For more details on the fourth quarter earnings season and evolving expectations for the periods ahead, please see our weekly Earnings Trends Report >>> Wall Street’s Big Banks Offer Mixed Start to Q4 Earnings Season
5 shares ready to double
Each has been handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have skyrocketed +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report fly under the radar on Wall Street, which provides a great opportunity to get in on the ground floor.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.