Banking Results in Focus

On the back of the USD reaction we saw to last week’s US banking sector results, traders are keen to receive further performance updates from the financial sector. Ahead of big dogs Morgan Stanley and Goldman Sachs tomorrow, traders will today be focusing on State Street which is due to report its Q1 performance today. On the numbers front, the market is looking for EPS of $1.64 on revenues of $3.126 billion. This will mark a slight softening in both EPS and revenues though, so long as expectations are satisfied, should see the company’s stock rally.

Implications For Today’s Results

With traders now looking for the Fed to hike by .25% next month, further positive earnings news today should keep that outlook intact, keeping USD supported near-term. As with last week’s banking results, traders will be paying close attention to bad credit provisions as well as the company’s outlook for the year ahead and its views on recession risks. Despite both JPM and Citi seen increasing their buffer levels for bad loans, both companies saw their stock prices rallying on bumper performance. With this in mind, should State Street’s results today come out above forecasts we can expect a similar sharp move higher as well as further upside in USD.

Technical Views

State Street

The rally off the 73.79 level and rising trend line has seen STT trading back up to just shy of the 82.55 level. This is a key pivot for the stock and a break higher here today will be firmly bullish, putting the focus on a test of the 91.64 level next, in line with bullish momentum studies. To the downside, should price break below current support, 59.35 is the next big support to note.