Of all the earnings releases coming this week, trader Joe Terranova thinks one could be a little more market moving than the others.
We’re talking about JPMorgan, which reports on Wednesday before the bell.
As the first big bank to release quarterly results, JPM will set the tone for the rest of the financials. "It's highly important," Terranova says.
And to make trading all the more treacherous, its earnings could move the sector, and by proxy the market, in either direction.
If this best of breed name leaves investors underwhelmed, other bank stocks could be punished. "If we get an unfavorable response to JPMorgan's report, I'd be concerned about the entire financial space," Terranova says.
However, if JPMorgan beats the Street the bank could take financials higher broadly and reverse market sentiment.
What should you expect?
For insights the desk turns to Gerard Cassidy of RBC Capital Markets who suggests the bias will be to the upside.
"I think the numbers will be very positive, particularly in credit," he says in a live interview on CNBC's Fast Money. He thinks investors are underestimating the power of improved credit.
He also says Bank of America, Wells Fargo, Citi and the regionals are all likely to experience improvement in credit. "It's driven by the economy and it should affect them all."
Check out our entire conversation with Cassidy. Watch the video now!