DJIA Closes Up +500 Points, Breaks Losing Streak

Updated: Oct 26, 2021

Written by: Kealan Bane

The Dow Jones Industrial Average snaps its four day losing streak, closing up +534.75 points or 1.56%. As the earnings season only swings more into motion, investors are starting to see early signs of strong Q3 earnings reports with four of the biggest banks in the country reporting an earnings beat, contributing to the push of getting the DJIA back into the green territory.



Bank of America

Bank of America (BAC) was expected to produce a revenue $21.60 billion and an EPS of 0.70. BAC beat their revenue expectations by a surprise of 5.39% producing a revenue of $22.77 billion and also beat their EPS by a surprise of 21.60% producing an EPS of 0.85. In Q4 of 2020, BAC reported an EPS of 0.51, showing some steady growth and sustainability from this time last year. This growth can be a potential insight into how the banks are doing in this time of economic concern. Bank of Americas stock rose +$1.93 or 4.47% today. The chief financial office of Bank of America, Paul Donofrio, had so optimistic things to say about the economy during the companies most recent conference call, “If you look at the economy, it’s improving, people are spending more and businesses are going to have to start investing," as well as stating, “We’re optimistic about the future.”


Wells Fargo & Company

Wells Fargo (WFC) was expected to produce a revenue of $18.31 billion and an expected EPS of 0.94. WFC beat their expected revenue by $520 million posting a total revenue of $18.83 billion resulting in a surprise of 2.84%. Wells Fargo also reported an EPS beat with a reported EPS of 1.22 resulting in a surprise of 29.19%. Wells Fargo has been talked about for beginning to cut some personal expenses, which surely helped contribute to this beat. The CFO of the company Mike Santomassimo has said that the adoption of digital capabilities has helped allow for the the bank to reduce the total headcount of employees as well as reduce office space, which has now been cut down by almost 2 million square feet. The company traded down -$0.74 or -1.61% today. Q4 of 2020 WFC reported an EPS of 0.42, Q3 2021 earnings more than doubled now, just under tripled.


Citigroup

Citigroup (C) was expected to produce a revenue of $16.93 billion but posted a beat on revenue of $17.15 billion resulting in a surprise of 1.32%. C also reported an EPS beat of 2.15 while have been expected to post an EPS of 1.79 resulting in a surprise of 20.43%. In Q4 of 2020 C reported an EPS of 1.40, yet again another strong increase in earnings YOY. The chief executive had this to say in a recent statement, "The recovery from the pandemic continues to drive corporate and consumer confidence." Citigroup closed up +$0.53 or +0.75% today. Another head of a big banks who seems to be coming on the optimistic and confident side of economic recovery.


Morgan Stanley

Morgan Stanley (MS), was expected to turn a revenue of $13.95 billion but instead beat the expectation by a surprise of 5.73% and posted a revenue of $14.75 billion. On the EPS side, MS was expected to report and EPS of 1.68 but reported an EPS beat of 2.04 resulting in a surprise of 21.62%. The companies stock closed up +$2.44 or +2.48% today. Unlike the other three big banks, Morgan Stanley did not release or sell any of the funds in the safety "stockpiles" that they built pre-pandemic to help avoid against loan defaults, they bought more. BAC releases $1.1. billion, WFC released $1.7 billion and C released $1.2 billion.


The Big Banks of the US have a Bullish Outlook

On top of these four big banks all posting earning beating number, yesterday on Wednesday, the countries biggest bank JPMorgan Chase (JPM) also posted an earnings beat. Tying all of this together as well as looking at the optimisms coming from the heads of these big banks, it seems to be that the banks seem to be performing relatively good in this time of economic concern.


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