Banks are potential under-performers and this earnings season they could be the biggest drag to US stocks..
For economy to do well, its banking sector has to be at least on even keel, if not racing on full throttle. But with ultra low interest rate causing ripple effects on banks' balance sheets, results of banks can be anything but ugly. Dovish stance of Fed on future rate hikes as also sharp decline in oil prices have not helped..
So be ready to get jolted this earnings season by dismal results of US banks. Other positive corporate earnings may act as countervailing effect to banks' earnings for US stock market to absorb the shock.
However, today Dow should remain positive since oil is up along with gold. It seems investors are slowly tucking away proceeds to gold as a safe haven, just in case the stock market tumbles. That can only explain gold price rising with the stock market. And yes, Dow futures is also up.
Oil being up is definitely a positive for the stock market. So be ready to welcome Dow in green territory today.
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