Earnings season gets a kick start this Friday.
Though it feels like it almost runs non-stop, this Friday is essentially what gets things started as a lineup of big banks are set to report.
We’ll get earnings tomorrow from JPMorgan, Wells Fargo, Citigroup and more.
And as you can expect, the markets are jittery with anticipation, especially towards interest rate comments after the Fed’s outlook for rate cuts slips away with persistent inflation as we talked about yesterday.
One big UOAÂ (Unusual Options Activity) targeting a big bank is what we are diving into today.
UOA on Citigroup
Heading into earnings tomorrow we have some big traders making moves.
On Citigroup (C), a trader pulled together a complex trade that is in no doubt hedged. So, take it for what it is worth.
But what they are positioning for, and stand to profit from, is an initial decline on earnings this week. However, then they are counting on the stock to hold up and climb since they sold put options to support the trade.
Overall, it is short-term bearish due to earnings, but still bullish on the stock after the initial reaction.
As this earnings season kicks off, keep in mind higher rates have been good for banks. But what they are starting to report is a trend from longer-term holdings, such as dated CDs and other investment products, pushed into shorter-term holdings due to higher rates.
That could make their business a bit more volatile due to the nature of shorter-term assets at the funds.
This is something to watch as we head deeper into a period of higher rates this earnings season.
Analyst Ratings:
A few analysts takes this week are below:
– Evercore ISI adjusts price target on Equitable Holdings to $46 from $42, maintains outperform rating.
– HSBC maintains Buy rating on American Express, raises price target to $239.
– Goldman Sachs trims price target on Invesco to $17.75 from $18, maintaining Neutral rating.
– Wells Fargo downgrades Marsh & McLennan to Equal Weight from Overweight, price target $212.
Stay current, stay informed, and most importantly, stay resilient.
S.E.A.L. Alpha Team