Bank earnings are in focus this week, with Bank of America and Morgan Stanley releasing on Tuesday, but traders should watch Charles Schwab (SCHW).
SCHW: Weekly Chart
The price of SCHW sank with the regional banking crisis, dropping to almost $44. The stock has rallied since then but found resistance ahead of the $60 level in time for the earnings.
Estimates for second-quarter earnings have been revised 2.6% lower to 74 cents per share. The consensus estimate for sales is set at around $4.61 billion, which indicates a fall of 9.6% from the year-ago quarter.
Market volatility and client activity were slow in the second quarter due to the US debt ceiling standoff. There are also fears of an economic downturn or recession, the central bank’s hawkish monetary policy, and geopolitical concerns.
After the regional banking crisis in March that followed the collapse of Silicon Valley Bank, investors were seen fleeing to the big Wall Street banks.
That could filter through to SCHW earnings, and analysts will keep an eye on deposits at the bank. Schwab’s operating expenses have also been higher in the past few quarters due to regulatory spending and strategic buyouts.
Any sign of stress at Charles Schwab would add bearishness to bank stocks this week.
