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The earnings season is coming up fast the major banks start Friday

The major banks start THE EARNINGS SEASON ON Friday

The major U.S. stock indexes finished the week down on Friday. Friday’s stock market saw wild swings and the major banks stocks are in focus. Investors reacted to the news that nonfarm payrolls in the United States rose by less than expected in June. Non-farm payroll (NFP) is a key leading economic indicator. The number released on Friday at a 230,000 increase was below market expectations.
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This was the lowest gain in over two and a half years. Market economists estimated for May nonfarm payrolls was +339,000, but this has been revised down to +306,000. So, let’s see what happens for possible revisions of the June number. The jobless rate dropped in June, dropping from 3.7 to 3.6 percent.
 
Keeping all this in mind, regarding the next move by the FOMC at the Fed, the data was not at a critical level of weakness. The probabilities of an increase in the Fed Funds Rate of +25 bp at the upcoming FOMC is predicted to be 90%. The effective federal funds rate is currently at 5.08%, but the market expects it to rise to a top of 5.40% percent by year end.
 

 CPI AND EMPLOYMENT

MAJOR BANKS
 
Thus, the NFP data will not prevent the Fed from raising interest rates at the FOMC meeting later in July. The rise in the NFP in June was smaller than economists had predicted. Nonetheless, the Fed is likely to remain hawkish if wage pressures persist. This is due to the unexpectedly large increase in U.S. average hourly wages in June.
 
 
The Consumer Price Index (CPI) for June, will be released on Wednesday. In the U.S. inflation is measured by CPI, and this is expected to slow again in June. There are optimistic estimates that the headline rate could fall to 3.0% in June.
 
This would be a full 1% decrease from May’s CPI reading of 4.0%. Keeping a close eye on core CPI which is expected to continue to moderate to 5.0% against May’s 5.3%. The S&P 500 Index (SPY) Friday closed down -0.29%, and the Nasdaq 100 Index (QQQ) closed down -0.35%.

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HAVE EARNINGS AT THE MAJOR BANKS PEAKED?

The earnings season is coming up fast. The major banks, Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC) will be up first. The major banks will report on deposits flows and loan growth, both are expected to be solid growth. Probably at the expense of the Regional Banks. The solid condition of the U.S. economy should mean that credit charges will start to improve. There is a keen debate s to if the bank’s earnings have peaked, this is unlikely.

EARNING SEASON STARTS FRIDAY

Thus, starting this Friday are State Street (STT), BlackRock (BLK), JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C). These major banks will all be releasing their quarterly earnings. The more undervalued banks are Bank of America (BAC) and Citigroup (C). In Healthcare UnitedHealth Group (UNH), will also release on Friday.

Nabors Industries (NBR)

The Top Stock Pick for Fri, July 7, 2023

The 20-Day Moving Average for Nabors Industries issued a New Buy Signal, with an Entry Price of $97.88.

On this basis NBR has outperformed the stock price over the previous five years. The returns +443.17% have been on a 20-day moving average buy signal compared to the market’s loss of -70.38%. The average transaction duration for the 61 trades used to calculate the Signal gain was 15 days.

NBR is one of the largest contractors in the world

In oil, gas, and geothermal land drilling activities, NBR is one of the largest contractors in the world. Nabors Arabia is the Saudi Arabian company that owns the company. The services offered cover oilfield management, engineering, and transportation. As well as construction, maintenance, well logging, and other support services.

major banks

NBR has four primary divisions

NBR’s four primary divisions are U.S. Drilling, International Drilling, Drilling Solutions & Rig Technologies, and Other Businesses. Drilling in the United States includes both onshore and offshore operations. Operations are in the continental United States, Alaska, and the Gulf of Mexico.

 

International Drilling operates in virtually all of the world’s significant oil and gas fields. The Drilling Solutions division supplies cutting-edge tools and techniques that improve drilling efficiency. The Rig Technologies division produces drilling rigs and offers maintenance and repair services.

Bond yields MOVE EVER HIGHER

Bond yields around the world continue to climb higher. In the U.S. the yield on the 10-year Treasury note is at a multi month high of 4.054%. The yield on the 10-year German bund is at 2.637%. The yield on 10-year UK Gilts declined to 4.650%, but the current yield is at a 14 year high.

On Friday the Euro Stoxx 50 closed up +0.32%. Shanghai Composite Index was down -0.28% and Japan’s Nikkei Stock Index was also down -1.17%.

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The earnings season is coming up fast the major banks start Friday

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Meet the author behind Smartest-Data. Warren William has a career in Finance and Investments extending over 35 years, both on the Buy Side and Sell Side. His most recent roles include, developing Institutional Risk Management Programs for managing Equity and Fixed Income Risk.  Prior to this Warren William work in Alternative Investments, in Investment Management and as a Buy Side Equity Analyst. Warren William brings a wealth of knowledge and expertise to the table, providing in-depth analysis and commentary on the latest trends in the Stock Markets. Contact information: wwBLOG@smartest-data.blog or Telegram +393339034488

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