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Even Earnings Can’t Save The Banks – The Daily Recap

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Michael Kramer owns XLF Puts

Michael Kramer and the clients of Mott Capital own shares of DIS and NFLX

The S&P 500 managed to get by today rising by about ten bps,  not terrible given the weak performance of the bank stocks. So it would seem to me the significant bank earnings that were supposed to deliver the massive upside didn’t materialize in my opinion. JP Morgan was the best of them, but even that beat wasn’t enough to rally the troops, because the stock finished off about 40 bps on the day. I will give credit though because Wells Fargo did rally off its lows to finish down only 1 percent.

It seems with the weaker than expected results; the attention is now drawing to a second half of the year story. But considering we are already in the second half of the year, maybe it is a fourth-quarter story. But whatever the case may be, the group continues to look bad.

Banks

I will be honest, I would rather see the banks rise because they are such a significant part of the broader market, and if the banks are falling or just treading water, it makes it harder for the rest of the market to lift.

JP Morgan’s stock failed right resistance again around $106.50.

Wells Fargo failed right at its resistance.

Citigroup, on the other hand, managed to hold support.

While the XLF managed to hold at support.

So let’s say the situation for the banks is fragile at best.

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Netflix

Let’s move on because Netflix got walloped today. Now if I said going into the earnings report on Monday that the risk for Netflix is greater to fall next week than to rise, and it was there was a chance they could miss subscriber estimates by 1 million subscribers or beat by 500,000 subscribers, I would probably get a tough time from my readers. Well, that is precisely what Deutsche Bank said, and the stock went down 4 percent. Now, I’ll be honest; I have can’t remember ever even reading a Deutsche Bank note on Netflix before. So I don’t know. It is anyone’s guess how the subscriber growth number is going to be. But if I had to take a guess, I think there is a better chance of them beating than missing, just a theory, but we can focus on it more this weekend.

Disney

If you have followed Disney as long as I have then you know the last three years have been painful because the stock has done Nothing!. But we are at an interesting point because a rise above $112 triggers a big break out, and it could be substantial, because of the three year period of sideways consolidation.

But if we fail, well it is a slow drift back to $100. I’m hoping for the breakout since I own it.

Micron

Micron is approaching what could be a significant break out if can cross above $57, sending shares back to $61.  But I will say, for all the wild swings in Micron since the March the stock has gone nowhere.

Walmart

Walmart so close to the breakout, maybe next week starts the rise to $93.50

Cisco

Now Amazon wants to get into switches and enter Cisco domain? What? Give me a break.

Under Armour

That under armor chart is ugly. Lower it goes. maybe $20

Have a great night!
Mike

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