Ten 2020 Democratic presidential candidates will take the debate stage Wednesday at the Adrienne Arsht Center for the Performing Arts in Miami.2020 Electionsread more
Something unusual is happening in financial markets, and it could mean more gains lie ahead for stocks, if history is any indication.Marketsread more
Underneath the impressive market rally is a trend that doesn't seem quite right, according to J.P. Morgan.Marketsread more
Virginia Sen. Mark Warner breaks down the idea behind a bipartisan bill he introduced to provide more transparency in Big Tech.Technologyread more
Venezuelan President Nicolas Maduro said security forces had foiled an opposition coup attempt that included plans to assassinate him and other top political figures.World Politicsread more
Credit Suisse initiated coverage of Tesla Wednesday with an "underperform" rating and a price target 15% below where the stock closed.Marketsread more
Tesla is working on new battery cell designs, and a way to make their own cells, with R&D teams in a lab near its car plant in Fremont, California.Technologyread more
These attacks have given the public the opportunity to examine the problems associated with ransomware, where corporations -- not obligated to disclose these attacks -- have...Technologyread more
Online home goods retailer Wayfair sold roughly 1,600 mattresses and 100 bunk beds to Baptist Child and Family Services, a nonprofit that works as a federal contractor...Retailread more
"As a private company we don't have the tools to make the Russian government stop," Facebook CEO Mark Zuckerberg said at the Aspen Ideas Conference on Wednesday. "We can...Technologyread more
Wi-Fi 6 will be the next-generation wireless standard. Along with 5G, it will represent the next big shift in connectivity and data, said Irving Tan, senior vice president and...Shaping the futureread more
Tax cuts, rising interest rates and a general spirit of more robust economic growth are the principal ingredients in what is expected to be an especially powerful profit formula for the banking industry.
As Wall Street's financial giants get set to report first-quarter earnings and provide a look ahead for the days to come, hopes are high. Corporate profits overall are expected to have risen 17 percent for the three-month period, but the financial sector has drawn especially keen interest.
In just the past three months, analysts have more than doubled their expectations for the financial sector as a whole, with banks leading the way.
Bank earnings are "really going to help provide stability to the market," said JJ Kinahan, chief market strategist at TD Ameritrade. "If [J.P. Morgan Chase CEO Jamie] Dimon comes out and says we're not having a problem with tariffs, that's going to be major. ... If CEOs say they see smooth sailing ahead, it could be an unbelievably great time for stocks. "
Just since Jan. 1, analyst projections for financial earnings went from a 10.7 percent gain all the way to 24 percent currently. Only energy, which has been the beneficiary of rising oil prices, has seen a higher net revision among the S&P 500's 11 sectors, according to investment research firm CFRA.
With financials comprising 14.7 percent of the index's market cap, the second highest after technology, such a big move could have important market consequences.
After all, the sector, as measured by the Financial Select Sector SPDR exchange-traded fund, is barely flat for 2018 after enjoying a robust run the previous year. A big earnings quarter implies some room for upside based on the stock performance.
CFRA expects banks to lead the way for financials, with earnings growth of 28.5 percent.
Analysts will be combing through the details for indications on where the sector is heading.
"As we head into first-quarter earnings, we still recommend an overweight positioning for
Universal Banks, as the fundamental backdrop is still supportive of further share-price appreciation broadly, " Brian Kleinhanzl and Michael Brown, analysts at Keefe, Bruyette & Woods, said in a research note. "Net interest margins and loan growth will remain in the forefront as indicators that the fundamental upside for estimates are still possible looking ahead."
Though KBW considers the sector largely a buy, it actually has cut earnings-per-share estimates for most of the banks it covers at a time when other analysts are raising.
Specifically, it has reduced its calls on Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan Chase and Morgan Stanley. Bank of America and Wells Fargo are unchanged from earlier projections, while KBW has raised estimates for State Street.
Still, the current expectations imply a 15.4 percent share price gain from current levels, the analysts said.
Elsewhere on Wall Street, the mood is essentially upbeat.
Goldman Sachs analysts said they "remain constructive" on the banking sector, with more than half the names in its coverage likely to top EPS estimates. The firm's analysts also see strong net interest margins and tax reform as positives, as well as increased volatility helping trading operations and higher interest rates boosting net interest income though having a negative effect on mortgages.