US Big Banks Q1 earnings: Will the rally resume? – Stock Market News

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The four biggest US banks will kick the earnings season this week, with JPMorgan Chase and Wells Fargo reporting their financial results for the first quarter of 2021 today followed by Bank of America and Citigroup on Thursday.

The price of bank shares more than doubled from the 2020 troughs, with JPMorgan and Bank of America growing slightly faster than the S&P 500 to hit new all-time highs comfortably above the 2019 peaks.

Bond yields determine the level of interest rates charged in financial markets; therefore, a steep curve means Banks can borrow short at the start of the curve and lend long at the end of the curve, making additional money.

Growth prospects for the US are brighter than any other economy at the moment given the super-accommodative fiscal and monetary policies and the fast inoculation program which continues without interruptions.

According to net income estimates, the first quarter of the year was profitable in quarterly terms for all banks besides JPMorgan, with Wells Fargo likely posting an extraordinary expansion of 6,492% y/y and experiencing a similar yearly boost in earnings per share .

Several companies went bankrupt in the US since then, but a bulk of capital reserves is said to be still in the storage, increasing speculation that more cash could be released into the markets this year.

In the previous earnings release, the results were weighted by the pandemic but encouragingly came in stronger than analysts expected.

Looking at JPMorgan’s stock, the rally from the 3 ½ -year lows topped at a record high of 161.69 in mid-March, but the price could not sustain its bullish momentum above the long-term resistance line, slipping below it instead to start a consolidation phase.

Should the results disappoint, with the bank maintaining some caution about the coming quarters, the stock may slip towards the 150.00 support area, where the 50-day simple moving average is converging.

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