Banks Are Powering Earnings Growth

The stock market is down slightly in early trading this week. There isn’t much movement on the Buy List so far, except that Nicholas Financial ($NICK) has given back a big chunk of its Friday surge. NICK closed last week at $15.94. Interestingly, that was on very heavy volume. There’s only been 800 shares today, but the last trade went off at $15.29.

On Thursday, Ford Motor ($F) lost a big part of its Wednesday rally. But the stock is currently back above $17 per share. We have a bunch more earnings this week, plus a Fed meeting and a jobs report. The government will also revised the entire set of its NIPA data. This means we will have entirely new numbers for the GDP data series. There’s nothing so surprising as the past.

The latest numbers show that 265 companies in the S&P 500 have reported Q2 earnings so far. Of that, 73% have beaten on earnings and 56% have beaten on sales. That’s not bad. Of course, banks have been doing the heavy lifting:

Earnings for companies in the S&P 500 are projected to climb 3.3 percent, led by a 27 percent increase in bank profits, based on more than 11,000 analyst projections compiled by Bloomberg. Without the financial industry, S&P 500 income would contract 1.2 percent.

The National Association of Realtors said that pending home sales fell 1% in June. This is interesting to watch because rising mortgage rates have impacted the housing market, but I don’t think the damage will be long-lasting.

Posted by on July 29th, 2013 at 10:41 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.