U.S. equities have shrugged off disappointing earnings results from Apple Inc. (AAPL) and Twitter Inc (TWTR) overnight to rise in mid-day trading on Wednesday thanks to an as-expected no-hike policy decision by the Federal Reserve. Trading, however, remains choppy.
While analysts are still reading the tea leaves, it appears the statement was somewhat hawkish despite the removal of language about inflation “picking up,” as officials removed wording about global economic and financial market risks. Overall, the futures market slightly increased the odds of a June rate hike.
The epicenter of the post-Fed volatility is the big bank stocks, which pumped and then dumped in afternoon trading as investors balance the positives and the negatives.
A rate hike would be good for net interest margins, but could weaken the economy and financial markets while boosting the dollar and weighing on oil. No rate hike would be the reverse of this.
Here are three stocks to keep an eye on.
Bank Stocks to Watch: Bank of America Corp (BAC)
Bank of America (BAC) shares rallied near their 200-day moving average in intraday trading on Wednesday before turning tail and falling back into negative territory. This caps a multi-week consolidation near $15, which in turn, caps a long sideways pattern going back to late 2013.
The lift from in-line earnings results, despite an 8% drop in revenues, has apparently faded. BofA will next report results on July 20 before the bell.
Analysts expect earnings of 37 cents per share on revenues of $20.97 billion.
Bank Stocks to Watch: Citigroup Inc (C)
Citigroup (C) is displaying a similar pattern to BAC: A strong intraday rally that succumbed to intense selling pressure. C stock, however, remains a distance away from its 200-day moving average — a level it lost back in December.
Also like BAC, the lift from above-consensus earnings of $1.10 per share on $17.6 billion in revenues, which was down 11.1% from last year, has faded.
Citigroup reports results on July 15 before the bell. Watch for earnings of $1.20 per share on revenues of $17.89 billion.
Bank Stocks to Watch: JPMorgan Chase & Co. (JPM)
JPMorgan (JPM) shares have spent the last few weeks near $64 — stalled at the lower end of its November-December trading range and a level that was first reached a year ago.
Investors have cooled on the first-quarter earnings beat reported earlier this month, likely due to the 3.7% decline on the top line vs. last year.
JPMorgan reports results on July 14 before the bell. Watch for earnings of $1.42 per share on revenues of $23.91 billion.