Jittery investors are closely watching action in financial stocks, as they prepare for a deluge of earnings information from the nation’s largest banks.
Considering most investors agree that the market can’t push higher without the financials, we may be nearing an inflection point. By Friday the Street will find itself awash in results from some of the nation’s largest banks. Take a look:
Financial Earnings This Week
Wednesday: JPMorgan
Thursday: Citigroup,
Thursday: Goldman Sachs
Friday: Bank of America
Widely followed analyst Meredith Whitney amplified nerves on Tuesday after she downgraded Goldman to ‘neutral’ from ‘buy” citing the company’s rapid rise in share price, though her outlook for the company remains bullish.
Whitney has a $186 price target on Goldman's shares, less than the median $205 price target among analysts surveyed by Thomson Reuters.
And it seems bearishness is growing. Fox-Pitt analyst David Trone doesn’t see much upside left. “Even if they put up good results I expect there will be selling on the news."
Christopher Zook of CAZ says much the same. “I’m with Meredith. I think they’re priced for perfection. Goldman has moved from 80 to 190. If things start to get rocky again I think the tone changes and I’d be taking profits.”
But not Brad Hintz of Sanford Bernstein. “I’m not saying everything is perfect but their fixed income followed business followed by an increase in M&A (translates) into Goldman making money.”
Considering the wide divergence of opinions, what must you know about bank earnings?
Strategy Session with the Fast Money traders
Meredith clearly has a bullseye on her back after this call, explains Guy Adami. I’m sure she didn’t make this call willy-nilly. You might not agree with her but you’ve got to listen.
Goldman traded down to $185 and then bounced, reminds Pete Najarian. That’s bullish action. I still expect Goldman’s earnings to be stellar. The question is really – is all the good news built into this stock? I don’t think it is.
Meredith has clearly been right in the past, reminds Karen Finerman. The bar is high for Goldman. And I think the bar is kind of high for JPMorgan. But I’m looking forward to earnings because I think it finally gives us real clarity.
I’d buy Goldman on a pullback, says Joe Terranova. And I think Meredith would too. She’s talking about valuations been too high.
What do you think? We want to know!
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Trader disclosure: On Oct. 13th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Finerman's Firm Is Short (IJR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (UNG); Finerman's Firm Is Short (USO); Finerman's Firm Is Long Puts & Calls (MDY); Finerman's Firm Owns (BAC), (BAC) Calls, (BAC) Call Spreads, (BAC) Preferred; Finerman Owns (RIG), (PDE); Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (MSFT), (TGT), (PDE), (BRCM), (WMT), (RIG); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WLP) Calls; Terranova Owns (JPM), (JOYG), (NOV), (GS); Terranova Is Short (GRMN), (CCL); Terranova Owns Dec. 2009 Gold Futures; Terranova Owns Dec. 2009 Crude Oil Futures; Terranova Owns Dec. 2010 Crude Oil Futures; Terranova Works For (VRTS); Najarian Owns (BRCD) Calls; Najarian Owns (C) Calls; Najarian Owns (DELL) Call Spread; Najarian Owns (INTC), Is Short (INTC) Calls; Najarian Owns (GE) Calls; Najarian Owns (JPM) Calls; Najarian Is Short (JOYG) Calls; Najarian Owns (LAZ) & Short (LAZ) Calls; Najarian Owns (MYL) Puts; Najarian Owns (TEVA); Najarian Owns (YHOO) Call Spread
For Zack Karabell
Karabell Owns (FCX)
Karabell Owns (UTX)
Karabell Owns (HON)
Karabell Owns (SINA)
Karabell Owns (EDU)
For Brad Hintz
Hintz owns an Equity Position in (MS)
Bernstein Owns (GS)
(GS) Has Been A Client of Bernstein In Past 12 Months
Bernstein Owns (MS)
(MS) Has Been A Client of Bernstein In Past 12 Months
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