Weak Banking Earning Reports May Recruit More Sellers in the Mar
The banking sector will be starting the Earning Report season of the third quarter this week. JPMorgan, the Bank of America, Wells Fargo & Co, Citigroup, Morgan Stanley, and Goldman Sachs will be the first to publish their Q3 reports.
The second quarter profit of the TOP-10 U.S. banks jumped by almost 250% year-on-year to $45.3 billion. Analysts are positively evaluating the banking sector’s prospects, but the amazing Q2 results would hardly be reached. Moreover, the overall profit of the financial sector in the United States is expected to rise by 17.4% year-on-year compared to 160% in the second quarter.
This week investors will be looking for September inflation figures and FOMC minutes that are to be released on Wednesday. High inflation at 5.3% remains the key factor affecting the Federal Reserve’s (Fed) monetary policy. Weaker than expected banking sector performance, high inflation, together with expected tapering from the Fed may add more sellers to the U.S. stock market.
Even though the debt ceiling issue is not buzzing now, it may become a trigger for the sell-offs at some point. The U.S. Senate raised the debt ceiling as a temporary solution. “The risk this debt-ceiling showdown roils markets like it did in 2011 is underappreciated,” Wells Fargo strategists Zachary Griffiths and Erik Nelson told their clients.
Nevertheless, Monday is expected to be a quiet day as the U.S debt market is closed due to Columbus Day. To become a serious threat, the Dow Jones and S&P 500 indexes have to break down the strong support levels at 33750-33800 and 4280-4300 points respectively. While it is not the case, it would be wise not to rush to open sell positions despite the fact that this September was the first month that closed lower after seven months of consecutive rally. This indicate that October may close lower too.
We may also look at the U.S. Dollar index that is gradually going up. Its closing above 94 points paved the road towards 94.70 points. If the latter landmark would be crossed together with the lows of January and March of 2021, then the index may surge to 96.40-96.80 points.
The second quarter profit of the TOP-10 U.S. banks jumped by almost 250% year-on-year to $45.3 billion. Analysts are positively evaluating the banking sector’s prospects, but the amazing Q2 results would hardly be reached. Moreover, the overall profit of the financial sector in the United States is expected to rise by 17.4% year-on-year compared to 160% in the second quarter.
This week investors will be looking for September inflation figures and FOMC minutes that are to be released on Wednesday. High inflation at 5.3% remains the key factor affecting the Federal Reserve’s (Fed) monetary policy. Weaker than expected banking sector performance, high inflation, together with expected tapering from the Fed may add more sellers to the U.S. stock market.
Even though the debt ceiling issue is not buzzing now, it may become a trigger for the sell-offs at some point. The U.S. Senate raised the debt ceiling as a temporary solution. “The risk this debt-ceiling showdown roils markets like it did in 2011 is underappreciated,” Wells Fargo strategists Zachary Griffiths and Erik Nelson told their clients.
Nevertheless, Monday is expected to be a quiet day as the U.S debt market is closed due to Columbus Day. To become a serious threat, the Dow Jones and S&P 500 indexes have to break down the strong support levels at 33750-33800 and 4280-4300 points respectively. While it is not the case, it would be wise not to rush to open sell positions despite the fact that this September was the first month that closed lower after seven months of consecutive rally. This indicate that October may close lower too.
We may also look at the U.S. Dollar index that is gradually going up. Its closing above 94 points paved the road towards 94.70 points. If the latter landmark would be crossed together with the lows of January and March of 2021, then the index may surge to 96.40-96.80 points.
