WHAT ARE YOUR THOUGHTS? Earnings season is back, and the big banks are up first.
JPMorgan and Bank of America both report Tuesday before the open, and both stocks are sitting at or near fresh all-time highs.
So here’s our question for you…
Are the banks confirming that this bull market has another leg higher?
Or are expectations getting too hot heading into one of the most important earnings weeks of the quarter?
Write us at [email protected]. We value your input and may feature your responses in a future post.
After several quiet weeks, the Beat Calendar is loaded again, and the big banks are leading us into the next wave of reports.
Financials have been one of the strongest areas of the market, and many of the world's most important banks are pressing toward new highs just as they get ready to report.
Are buyers still willing to reward strength?
Are the fundamentals strong enough to support these breakouts?
And can earnings sentiment finally confirm what the charts have already been telling us?
Last week still gave us plenty of useful signals, from small-cap healthcare strength to semiconductor stress, insurance rotation, monster tech breakouts, and another weak report from consumer staples.
But this week, the spotlight shifts back to the major earnings calendar.
We’ll start by reviewing what happened last week, then turn our attention to the two reports we’re watching closest.
Since there were no S&P 500 earnings reactions to cover, we highlighted LifeStance Health $LFST. This is one of the largest outpatient mental health platforms in the U.S., offering in-person and virtual care across psychiatry, therapy, psychological testing, and other behavioral health services.
LFST is breaking out to the highest level since 2021 with very strong fundamentals and earnings sentiment.
While the semiconductor industry is showing signs of short-term weakness, ChipMOS Technologies $IMOS is bucking the trend and making new all-time highs.
This Taiwan-based semiconductor stock has delivered triple-digit earnings growth in each of the past three quarters, while revenue growth has remained solidly positive.
With capital rotating into the insurance industry, we highlighted one of our favorite names in the space. Its name is Reinsurance Group of America $RGA.
RGA has very strong fundamentals and earnings sentiment, and it's on the cusp of breaking out to new all-time highs.
There are a lot of silly stock names in the market, but every once in a while, the funny name belongs to a very serious stock. That's exactly what we have with Penguin Solutions $PENG.
PENG just crushed the market's headline expectations and rallied more than 25% as a result. In the latest quarter, Penguin reported 47.6% YoY revenue growth and 78.7% YoY EPS growth.
Despite reporting a top- and bottom-line beat, PepsiCo $PEP fell 3.3%, snapping a 4 quarter beat streak. Now the stock is sitting at a key level of interest around $135.
The company's international business remains strong, but North America is improving more slowly than expected.
What's happening next week 👇
Earnings season is BACK!
After several quiet weeks, the Beat Calendar is loaded with market bellwethers next week.
This week, we’ll hear from some of the biggest financial institutions in the world, including JPMorgan $JPM, Bank of America $BAC, Goldman Sachs $GS, Wells Fargo $WFC, Citigroup $C, Morgan Stanley $MS, BlackRock $BLK, Bank of New York Mellon $BNY, and more.
We’ll also get important reports from ASML $ASML, Johnson & Johnson $JNJ, United Airlines $UAL, UnitedHealth $UNH, Taiwan Semiconductor $TSM, GE Aerospace $GE, Abbott Labs $ABT, Netflix $NFLX, Intuitive Surgical $ISRG, among many others.
So yes…
The earnings tape is about to light up again.
And before we move into the next wave of reports, we’re also getting ready to release our next Beat Quarterly report, which breaks down the technicals, fundamentals, earnings reactions, reaction scores, sector trends, and the biggest winners and losers from last quarter.
But looking ahead to this week, our attention is squarely on the big banks.
More specifically, JPMorgan and Bank of America.
Both stocks report Tuesday before the open, are printing fresh all-time highs, and both can tell us a lot about the health of financials, the economy, credit, deposits, lending, trading activity, investment banking, and risk appetite.
Let’s start with JPMorgan.
JPMorgan is the most important bank in the world.
This is the heavyweight. The fortress. The name every other bank gets measured against.
The stock has been in a monster primary uptrend, but it has spent the past several months digesting those gains in a sideways range.
The key level to watch this week is $337.
If JPM can break out above $337 and hold it, the next leg higher is decisively underway.
But if the stock fails here again, it probably needs more time to work through supply.
With JPM, the fundamentals are very strong, but the earnings sentiment is weak.
Last quarter, JPMorgan delivered a blockbuster report, but the market didn't care.
Instead of rallying on the news, JPM fell 0.82% and declined further in the month after the report.
JPM has now been punished for four consecutive earnings reports, and that's the issue.
So with JPM, we have strong fundamentals and a strong long-term chart, but earnings sentiment has been the headwind.
This week’s report is about whether that finally changes.
Now let’s look at Bank of America.
While JPM's technicals look good, BAC's look fantastic.
BAC has already broken above $57.50, which was the key shelf of former highs.
This recent breakout decisively resolves a multi-year accumulation pattern and begins a new markup phase.
And that's exactly what we want to see heading into earnings.
The fundamental story is also improving.
Last quarter, Bank of America had broad-based strength across its business, and unlike JPMorgan, BAC has been showing better earnings sentiment.
The stock rallied after last quarter’s report and saw its strongest pre-earnings drift in years heading into that event.
Now buyers are showing up again ahead of Tuesday’s report.
So long as BAC holds above $57.50, the path of least resistance is decisively higher for the foreseeable future.
At the Beat Report, we aren't just looking for companies that beat estimates.
We're looking for the stocks with the strongest technicals, fundamentals, and earnings sentiment.
That's our fusion analysis approach.
And this week, the big banks are giving us one of the first real tests of the new earnings season.
If a new trade comes out of this week's earnings reports, Beat Report members will be the first to know.
Cheers,
-The Beat Team
Editor's Note: If you've got a job and can't babysit a screen all day, most trading services aren't built for you.
Grant runs US positions from the other side of the world, asleep while Wall Street is open, using orders he sets before the bell.
He's showing you exactly how it works in a free live training on July 15 at 8 PM ET.
