FXCM’s US.BANKS basket bounces with Q2 earnings

  • US.banks
    (${instrument.percentChange}%)

Weekly Analysis


FXCM's US.BANKS basket is trending up. It has charted a series of higher troughs followed by higher peaks. Moreover, its weekly stochastic has moved into its upper quintile (green rectangle) suggesting a strong underlying bullish momentum. The longer the oscillator maintains this position, the greater the likelihood that the basket appreciates further.

Daily Analysis


The daily chart shows the US.BANKS candlesticks trading in their bullish channel between the upper red and blue bands. The red Bollinger bands are also pulling away from each other (black ellipses), which denotes an increase in the basket's underlying volatility. The daily RSI is on the bullish side of 50 (blue rectangle), which is price supportive.

Comment

We find in interesting that it is essentially the interaction of the last three candlestick that have moved the Bollinger bands and indicated higher volatility. This coincides with the release of the big banks Q2 earnings.

Effectively we saw profits surging at JPMorgan Chase (JPM.us) and Wells Fargo (WFC.us) on Friday, posting profits of 67%and 57% respectively, in large part due to net interest income. Bank of America (BAC.us) kept up with the momentum yesterday, which saw profits increase by 19%.

Citigroup (C.us) disappointed somewhat with a 36% drop in profit. However, this was due to a slump in dealmaking rather than consumer based.

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Morgan Stanley (MS.us) beat on earnings, but profit slid 12% also due to a slowdown in dealmaking. However, the bank compensated with good results from its wealth management business. It also raised its dividend by 9.7% to 85cps and authorised $20bn in share repurchases.

US.BANKS is rebounding after reaching its lowest point in 2023 following a series of regional bank collapses earlier this year, including the demise of Silicon Valley Bank in March.

Goldman Sachs (GS.us) reports later today.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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