EarningsBeats Digest

Published: Fri, 07/02/21

EarningsBeats.com Digest for July 2, 2021

Wall Street's Grades for Key Money Center Banks Heading Into Earnings

Relative strength provides me many of the clues I need to trade more effectively. Wall Street firms can do one thing that we cannot. They meet with company management throughout the quarter to discuss their business strategy, plan, and execution. And then they essentially "place bets" with their money as we approach earnings season. If you compare the relative strength of companies within the same industry, you can easily see which companies Wall Street professionals favor and which companies they do not. Here's a current comparison of key money center banks:

When I look at these 5 large banks, I believe Wall Street has broken them down between banks they want to own (WFC, PNC, BAC) and banks they don't want to own (JPM, C). This could all change next quarter, but based on all available information, Wall Street has evaluated management and assigned grades as I've shown above. Any company that is a strong relative performer is a potential trade candidate for me after earnings are reported. I especially like companies with excellent relative strength that "sell on the news", so I'll be watching for that as earnings season kicks in.

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
Better Timing. Better Trades.