Watch the Regional Banks Here
Friday morning saw the opening of earnings season, but things really start swinging this week. 
For the week, we’re going to see more than 200 different earnings reports from three major sectors.
Last week’s rough start for the banks puts more pressure on the wider swath of companies from the banking industry that will provide their reports.
The largest of the banks reporting this week include Goldman Sachs (GS), Bank of America (BAC), and Morgan Stanley (MS). But it’s the smaller regional banks that will report later in the week that the market will pay more attention to.
A year ago, regional banks were trading in turmoil after multiple failures in the industry.
We’ve seen buying in the sector as investors look forward to the Federal Reserve lowering interest rates. Remember, these banks’ businesses are very loan centric, meaning the higher rate environment tends to slow their growth.
Recent data showing that inflation has been stickier than thought may have a ripple effect on these stocks. Approach the group cautiously.
Dow Theory Confirmed or Denied This Week?
I’ll simplify it, but Dow Theorists look for leadership from the transportation sector.
The thinking is that a growing economy is doing well consumers will buy goods which need to move from manufacturers to retailers. Pretty simple.
Among the 200+ earnings reports this week are CSX Corp (CSX) and JB Hunt (JBH). There are other transport companies, but these are the two you should be watching.
Strong reports and outlooks from both will fortify the argument that the economy is getting stronger.
Shares of JB Hunt just ripped through their 200-day moving average, while CSX shares are in the process of rolling over from their highs.
The technical activity here puts Transports on the hot seat this week.
Finally, the “Earnings Sleeper” of the Week
I like to scan the upcoming earnings every week to find a company or two that are “Sleepers.”
The companies that most people aren’t talking about, even though they should.
I’ll go into this more tomorrow, but this week’s “Sleeper” is Netflix (NFLX).
Netflix has spent the last two years rising from the streaming ashes and now sits just 11% from breaking out to new all-time highs.
The company reports results on Thursday after the close, and I think its odd that we haven’t seen much in the way of headlines on NFLX heading into the announcement.
I’ll cover this a little more deeply tomorrow.
Until then, enjoy the rest of your weekend.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.