Stocks Climb on Bank Earnings

[tsptalk]

Stocks Climb as Major Banks Report Earnings

Banks including Bank of America and Morgan Stanley post rise in profits

https://www.wsj.com/articles/global...8kl8w06voxr&reflink=desktopwebshare_permalink

 

[Bullitt]

After JPM got hit yesterday, I was planning on my BAC holdings being down 3% today since the implied volatility was +/-3% at yesterday's close. Instead, I'm pleasantly surprised. That's rare. Whether it makes a new high this week or not is anyone's guess. Banks will be vulnerable to main market correction if it happens, but XLF appears to be showing some strength the past 4-5 weeks.

 

[TommyIV]

This article is almost two months old but still holds it weight now with bank earnings underway and the Fed looking to start tightening monetary policy soon. XLF is already outperforming the broad market indices but while investors worry about the Fed raising rates next year, banks could benefit.

...it is very probable that interest will be moving higher from here, and that is generally good news for financial services firms. That's because they can borrow money at short-term rates, and lend it at long-term rates - profiting from the spread.

XLF: Financials Could Thrive With Higher Inflation And Interest Rates

 

[tsptalk]

True, banks do well when yields are rising, but ironically I think today's rally in the broader market, particularly the Nasdaq, may have as much to do with a third straight day of decliningn yields. If that flips around in the coming days, things could change.

That said, today's gains do a lot to help the charts.