Dr. Stoxx
Stock Trader & Author, Oxford DPhil, Trading Education
Bank stocks look buyable if systematic selling is reacting to a flatter yield curve: the front end that drives earnings has barely moved. JPMorgan and Citi card spending rose 10% and 13%, and Citi and Wells Fargo reported lower credit losses. Wells expects steady margins and improving interest income as loans grow and old fixed-rate assets roll into higher yields. Funds crowded into banks before results, limiting near-term buyers. x.comÂ
Goldman Sachs looks set for a major breakout and could catch up to Citigroup after banks broadly reported strong earnings. Goldman and JPMorgan are both working on weekly breakouts; Goldman's daily chart is gappy, so entries near the daily 9 EMA look better. x.comÂ
Citigroup leans bearish despite a record Q2 beat because it guided to a weaker second half, with expenses set to outgrow revenue. EPS beat by about 16% on record equities trading, but the stock cannot hold its 50-day EMA and has formed a bearish flag after the post-earnings flush. Holding 131.40 would stall the move; losing it would break the flag toward 129.17, 127.08 and 123.24. x.comÂ
Banks' weak response to earnings despite low expectations warrants caution into the rest of Q3 reporting. JPMorgan, Wells Fargo, Citigroup and Goldman Sachs all fell after mixed results, while the bank ETF also declined. x.comÂ
The big six US banks should report great Q2 results as the front line of a solid economy. Net interest income, fee growth, steady credit trends and capital levels all look supportive, and valuations remain cheap, leaving opportunities to add. x.comÂ
Citigroup's rally looks overdone. It is not a super-premium franchise, yet the stock has tripled since 2023. CEO Jane Fraser's plan is working and the shares were far cheaper than other money-center banks for the past decade, as @RAMCOCAPITAL notes, but the market seems to be making the wrong call on whether Citi is a credit card issuer or an investment bank and broker, though that view could be mistaken. x.com x.comÂ
JPMorgan looks remarkably cheap against nearly every other bank despite being the best of them. Its forward P/E looks to be around 13. x.comÂ
JPMorgan is buyable on pullbacks to its daily 9-period moving average ahead of an earnings run-up in early July, with financials such as Goldman Sachs, Citigroup, Interactive Brokers and Bank of America doing great. x.comÂ
Citigroup's Q1 shows the trading side of bank income statements is running hot, which bears had not priced in. Equities trading revenue was $2.08B against a $1.73B estimate, and Citi is not historically the strongest desk, which bodes well for Goldman Sachs and Morgan Stanley. Every tariff scare, Fed headline and geopolitical shock fed trading flow. Credit quality and loan loss reserves remain real concerns, but banks beaten up on macro fear are running stronger underneath. x.com x.comÂ
GM, Comcast, CVS, Bristol Myers Squibb, Pfizer, Citigroup, Lululemon, UPS, FedEx, Disney, PepsiCo, Target, Netflix and Uber are favorite value stocks right now. The picks rest on valuation, free cash flow, balance-sheet quality and how much pessimism is already priced in. x.comÂ