Crypto Whales Are Loading Up — Are You?
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Despite mostly positive earnings reports out of six of the largest American banks, financial stocks have slumped since big banks earnings season started last Friday. Bank of America Corp (NYSE: BAC), Citigroup Inc (NYSE: C), Morgan Stanley (NYSE: MS), Goldman Sachs Group Inc (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM) all reported Q4 earnings beats, while Wells Fargo & Co (NYSE: WFC) came up 4 cents short of consensus EPS estimates.
Unfortunately, the solid numbers haven’t translated to positive share price momentum for investors. Since last Friday, the Financial Select Sector SPDR Fund (NYSE: XLF) is down 2.0 percent, and all six banks stocks mentioned above are down between 2.6 and 4.0 percent.
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Delving Into The Selloff
While the selloff is likely disappointing for shareholders, it shouldn’t be particularly surprising. Bank stocks have been red-hot in recent months. Each of the six U.S. mega-banks is up between 18 and 40 percent since mid-October.
In addition, earnings historically don’t have too much correlation with bank share prices. Looking back at the previous five quarters, the six companies mentioned above beat consensus Street EPS numbers in 25 out of 30 collective quarters. In the week following those 25 earnings beats, the banks generated an average return of +0.97 percent. In the week following the five earnings misses, the banks generated an average return of +0.92.
Surprisingly, the better bank earnings are, the worse share prices have performed in recent history. In two out of the last five quarters, all six of the big bank stocks beat earnings estimates. In those two quarters, bank stocks generated an average one-week return of -1.39 percent.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.