We're getting into the heart of earnings season now, with fourth quarter earnings rolling in.
The dynamic continues.
Last quarter, 71% of earnings beat estimates for the quarter. And despite the analyst expectations that there would be an overall decline in S&P 500 earnings, the overall earnings reported by companies grew by 3%. Sounds positive, right?
Still, management, on a whole, was downbeat on their guidance for what the fourth quarter would bring. They set the bar low. And, with that, the early Wall Street expectations for earnings growth has been dialed back, setting up for positive surprises.
Historically, about 68% of S&P 500 companies' earnings beat estimates.
PMorgan Chase stole the show, beating earnings by 20%. PNC beat by 6%. Bank of America beat by 5%. This is all positive for the trajectory of banks
But the story here for the bank stocks is even more exciting when you consider that many of the regulations, which have turned banks into utility companies since the financial crisis, will be reversed by the Trump administration.
Even last year, the health of the banks was looking as good as it has been in a long time. Loan balances were growing at the fastest 12-month rate since 2008,
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