Earning season is coming and the magic 8 ball likes it

Andrew Giovinazzi

BY ANDREW GIOVINAZZI

October 15, 2024

Yo Pit Crazies,

Earnings season can be like the Magic 8 ball of yesteryear except there are early trends you do not want to miss. Right now the season is kicking off with a bang.

It is hard to tell what stock this is below so I will tell you right now. It is JPMorganChase Corp (Ticker: JPM) and it is up close to 10x since 2012. Yup that is right since 2012. It is up 20x+ from the financial market lows and all the while paying dividends. Jaime Diamond knows how to run a bank.

JPM 12 year chart

The chart below is JPM after earnings last week. Stocks jumped another 1.5% after this earnings too.

Speaking of earnings season, there is some help on the way here.

So will JPM be a bellwether for earnings this cycle?

Good bank earnings are great for stocks

Goldman Sachs Inc (Ticker: GS) is on tap for today. If GS produces, expect the other banks to do at least ok. Put it this way, if GS and JPM have poor earnings, the other banks will suffer worse. If JPM and GS do well, that is generally a healthier market. If banks do horribly, that means conditions are very bad, similar to 2023 when there were so many write-downs for US Treasury securities that the Fed made the banks take onto their balance sheets post-GFC. Then the Fed jacked rates and killed the banks’ balance sheets. That was fixed when banks that needed capital could borrow at par value on their bonds and instantly ended the problem. Stocks have been up since then. A couple more good earnings out of this week, and that is one more reason to think 6000 for SPX is in the bag.

Catch trading into earnings here.