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This week, it's all about "TBTF" banks – as in, "too big to fizzle."
There's a lot riding on the financials, but I'm looking at pharma and healthcare, too, and I'll tell you why in a minute.
Fact is, this is one of the most important earnings seasons in recent memory, and investors are flat-out worried that it'll be one of the worst earnings seasons in recent memory.
JPMorgan Chase & Co. (NYSE: JPM) officially kicked off Q1 earnings season on Friday with a welcome revenue beat that nudged stocks gently upward for the day.
On the other hand, Bank of America Corp. (NYSE: BAC) reported a bumper crop of profits on Monday, but the shares slumped anyway because CFO Paul Donofrio voiced concerns about the slowing pace of interest rates – a big driver of bank profits.
Same deal with Goldman Sachs Group Inc. (NYSE: GS): It had a convincing earnings beat and a tasty dividend hike, but a drop in trading revenue sent the shares lower.
That shares didn't necessarily take off is a pretty good indicator of the worry out there in the streets. Freaked-out investors are punishing stocks for "sins" they might've forgiven two or three quarters back.
Me? I'm not sure it'll be the worst earnings season in years, but it's certainly going to be the one of most eventful.
Because, remember, it doesn't matter if a stock goes up or down on good or bad earnings. It just has to move…
About the Author
Chris Johnson is a quant - he's obsessed with building and perfecting mathematical models that allow him to predict, with startling accuracy, the direction of the markets, entire sectors, and individual securities. For the last year, he's been researching and building a new system that lets him move swiftly in and out of the hottest stocks in the market for life-changing gains - entirely on his own terms. The results of his newly-minted Night Trader system are nothing short of amazing.
Chris also contributes to Money Morning as the Quant Analysis Specialist.