Earnings Season Begins with Mixed Results

The move higher in the VIX yesterday afternoon showed investors there is concern about the surge in COVID-19 case counts in the southern and western states. California is navigating a second shutdown and considering the size of that economy, the lockdown news out that state will be market moving.

Premarket trading has the financials in play as earnings from JPMorgan, Citigroup, Travelers and Wells Fargo showed mixed results. Additionally, Delta reported earnings this morning, giving investors an idea of what to expect from the airlines.  

Outside of the banks, traders will be eyeing the Nasdaq and big tech stocks off the open. If the reversal seen yesterday should continue lower, momentum traders might be caught long and forced to sell.

S&P Futures Trading Levels

The S&P futures currently sit at 3160, about 20 handles off of Monday lows.   

Support levels for the day will be 3117 and 3090 (200-day).

Upside resistance is 3172 and 3203.

The current S&P environment is trending upwards, but yesterday’s reversal might change the tone. The Nasdaq has failed to break the top of its bullish channel and might need to see some liquidation and a consolidation at lower prices.

Three Stocks to Watch

JPM- JPMorgan beat EPS expectations by 4 cents, which has the stock trading 2% higher. Revenues were fueled by trading and saw an increase in customer deposits.The quarter was a nice rebound from the big Q1 miss and shows investors this isn’t 2008 again. 

TRV- Travelers reported a big miss after the company took a hit on catastrophe losses. The blame was put on severe storms and civil unrest. The stock is a component of the Dow and could be a drag on the index.

DAL– Delta saw a 0.37 miss on EPS, which has the stock off about 1%. Revenue did come above expectations and commented that the daily cash burn situation has improved each month since march. However, the firm commented that it will be two years before there is a sustainable recovery.

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