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Stocks slightly higher as bank earnings come in mixed

Stocks slightly higher as bank earnings come in mixed

Stocks ticked up Wednesday morning as a host of major banks released a mixed set of quarterly results.

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Dow component Goldman Sachs (GS) on Wednesday reported third-quarter results that well exceeded consensus estimates, as investment banking and fixed income trading revenue each grew over last year and topped expectations. The trading boost Goldman Sachs and other banks including JPMorgan Chase and Citigroup but it did not extend to Bank of America (BAC), which posted lighter-than-expected trading revenue from stocks and bonds, and a miss on overall revenue compared to estimates. Bank of America also built its credit reserves during the quarter, adding more padding in case of potential customer loan defaults amid the pandemic.

At Wells Fargo (WFC), the company swung back to a quarterly profit in the third quarter after a loss in the second, though income missed expectations and was pressured by low rates, and activity overall remained low as both loans and deposits declined.

Meanwhile, lackluster prospects for more stimulus and concerns over the timeline for developing a COVID-19 vaccine and treatment weighed on investors. Each of the S&P 500, Dow and Nasdaq declined for the first time in five sessions as of Tuesday’s close.

An impasse among U.S. lawmakers in Washington has kept hopes running low that more virus relief aid will come to fruition before the November election. Senate Majority Leader Mitch McConnell said Tuesday he will have the Senate take up relief legislation after the chamber’s return on Monday, with his narrower proposal set to include funds chiefly targeted to the Paycheck Protection Program. House Speaker Nancy Pelosi, however, has rejected slimmed-down stimulus proposals and deemed them inadequate, and even President Donald Trump said on Tuesday on Twitter to “Go big or go home!!!” for more stimulus.

Meanwhile, a pair of front-runners

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Fulton Financial (FULT) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

Fulton Financial (FULT) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

The market expects Fulton Financial (FULT) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2020. This widely-known consensus outlook is important in assessing the company’s earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 20. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management’s discussion of business conditions on the earnings call, it’s worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This financial holding company is expected to post quarterly earnings of $0.19 per share in its upcoming report, which represents a year-over-year change of -48.7%.

Revenues are expected to be $217.30 million, down 3.1% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 50% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company’s earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the

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Regions Financial (RF) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

Regions Financial (RF) Expected to Beat Earnings Estimates: Can the Stock Move Higher?

The market expects Regions Financial (RF) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended September 2020. This widely-known consensus outlook is important in assessing the company’s earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 20. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management’s discussion of business conditions on the earnings call, it’s worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This holding company for Regions Bank is expected to post quarterly earnings of $0.34 per share in its upcoming report, which represents a year-over-year change of -12.8%.

Revenues are expected to be $1.50 billion, up 0.2% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 5.21% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company’s earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate

Read the rest
Apple’s New iPhone and Amazon’s Prime Day Could Drive the Stock Market Higher

Apple’s New iPhone and Amazon’s Prime Day Could Drive the Stock Market Higher

Apple CEO Tim Cook speaks onstage during a product launch event at Apple’s headquarters in Cupertino, California on September 10, 2019.


JOSH EDELSON/AFP via Getty Images

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Two big tech events get started Tuesday—and they might be more important for the stock market than any of the day’s other news.


Apple

reveals the iPhone 12 today at an event that can be live-streamed here beginning at 1 p.m. Eastern time.

Apple stock is up 69% this year, and has a market value of more than $2 trillion. An iPhone supercycle is supposed to drive Apple shares even higher.


Amazon.

com’s Prime Day—actually two days—is here. E-commerce has boomed amid the pandemic, and the setup for this holiday shopping season is extraordinary.

Amazon stock has been extraordinary too. Shares are up 86% year to date and the stock now has a market value of about $1.7 trillion.

Tech, particularly big tech, now rules the market. The

Nasdaq Composite

has outpaced the

S&P 500

and

Dow Jones Industrial Average

in 2020, and looks set to do so on Tuesday.

And when Amazon and Apple are doing well, the market usually does well too. Together, they make up about 12% of the market capitalization of the S&P 500, and cover up the fact that 51% of the index constituents are down on the year.

For investors interested in the future of the market, Apple’s launch is must-see TV.

Al Root

*** Join Ian Bremmer, founder of the Eurasia Group, and Barron’s Beverly Goodman today at 12 p.m. EDT for an outlook on global macroeconomic risk and how that affects the U.S. economy and election.

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With higher provisioning, Bajaj Finance is tackling the COVID challenge aggressively, but will it be enough?

With higher provisioning, Bajaj Finance is tackling the COVID challenge aggressively, but will it be enough?

As the pandemic forced everyone to work out of the confines of their homes, Bajaj Finance (BFL) chairman Sanjiv Bajaj cheekily told a TV anchor, “Clearly, the joyful moment is the amount of time that I have been able to spend at home. But I do not know if it is joyful for my wife and kids, or my father!” The soft-spoken 50-year-old was candid enough to admit that at times they did get fed up with each other. “But it has just made us open up,” mentioned Bajaj. This pragmatism has also reflected in the way Bajaj has been able to build the consumer finance business with a close-knit team. While Citi veteran Nanoo Pamnani, who helped Sanjiv build the financial services business post its demerger from Bajaj Auto, passed away this February, more than 75% of the management team has been around for about 7-18 years, which analysts believe partially explains the sustained business performance over the period.

Not surprising, foreign portfolio investors (FPIs) have been bullish on the stock as a proxy to India’s growing appetite for consumer financing. As of June 2020, FPIs held 21.24% compared with 7.26% held by domestic mutual funds. The stock has surged 8.5x over the past five years from 410 to 3,475 and that is after having retraced from an all-time high of 4,923 in February. Post the pandemic, the key question now is will Bajaj Finance continue to be an investor favorite?

With nearly 43 million borrowers and a loan book of 1.38 trillion, BFL has emerged as the poster boy of retail credit. So much so that analysts believe BFL is a Goliath that is too big to fail.

“One of the key reasons behind the strong growth in AUM (assets under management) is the expansion

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