Earnings Season Kicking Into High Gear: Banks, TSLA, NFLX

On top of strong earnings reports from $JPMorgan Chase(JPM)$ , $Wells Fargo(WFC)$ , $Delta Air Lines(DAL)$ and positive economic data from last week，US stocks rose. While judging from the results of financial stocks on last Friday, the results were mixed.

Positive: Large institutions such as $JPMorgan Chase(JPM)$ and $Wells Fargo(WFC)$ benefited from the boost in consumer business, and their performance exceeded analyst expectations. Among them, $JPMorgan Chase(JPM)$ Chase reported a 67% increase in second-quarter profit and see stock price hit new highs.

Nagative: $Citigroup(C)$ , which is more reliant on investment banking, its revenue declined 1% YoY. Citigroup Chief Executive Jane Fraser said a long-awaited rebound in investment banking didn't materialize, leading to poor quarterly results. Shares fell more than 4% in response.

Last week, however, earnings from $Delta Air Lines(DAL)$ , $Pepsi(PEP)$ , $JPMorgan Chase(JPM)$ and $Wells Fargo(WFC)$ all topped analysts' expectations, but stock prices were muted.

This week's key Focus:

• Tuesday's earnings reports from $Bank of America(BAC)$ and $Goldman Sachs(GS)$ will provide more information on the state of the U.S. financial system following this spring's banking crisis. Analysts expect investment banking of these banks to decline compared to the first quarter 2023, with Goldman Sachs CEO David Solomon's comments particularly noteworthy.

• On Wednesday, $Tesla Motors(TSLA)$ and $Netflix(NFLX)$ will become the first tech giants to report their second-quarter results. The locomotive of the rise in US stocks this year has been the large technology companies, so their earnings reports have also attracted much attention.

$Tesla Motors(TSLA)$ have risen nearly 130% this year, driven by the AI boom, strong vehicle delivery numbers and a rapidly expanding charging network.

Goldman Sachs analyst Mark Delaney noted on Thursday that the focus of the earnings report will be on non-GAAP auto gross margins as investors worry that recent price cuts could hit the company's bottom line.

Victoria Fernandez, chief market strategist at Crossmark Global Investments, also said that what they really care about is profit margins, which reflect the company's pricing power.

Shares of $Netflix(NFLX)$ are up 50% this year, a much smaller gain. The company's streaming business appears to have reached an inflection point, so investors will be keen to see how the latest Hollywood strike will affect the company's business plans.

Earnings for $S&P 500(.SPX)$ are expected to fall by 7% this quarter. Ross Mayfield, an investment strategist at Baird, said that the earnings beat will be enough to maintain the stock's vested gains, but to continue to rise, it may need earnings results to beat expectations significantly or revenue and earnings beat expectations. Let's look forward to it together.