NEW YORK ( TheStreet) -- The earnings parade picks up speed this week with 13 larger banks reporting second-quarter results.
The earnings bar has been raised after the strong performance from two "too-big-to-fail" banks, JPMorgan Chase (JPM) and Wells Fargo (WFC) as these stocks rallied 6% and 3.25%, respectively, on Friday.
I profiled JPMorgan Chase and Wells Fargo a week ago in "Key Earnings Reports This Week", and the pop in JPMorgan Chase's shares was not surprising as the "London Whale" derivatives loss was shy of the $9 billion that some analysts feared.
The bank reported a loss of $5.8 billion and said it may increase by another $1.6 billion.The better-than-expected earnings report was helped by the bank's reduction in reserve for losses. This practice has been an underlying theme in earnings from banks over the past several quarters.
My benchmark for the larger banks it's the KBW Bank Index (BKX), which consists of 24 of the U.S.'s largest FDIC-Insured financial institutions. The BKX is up 41.0% since October 2011 and 16.5% year to date. The weekly chart of the index (below) is positive with a rising momentum reading (12x3x3 weekly slow Stochastic) with a weekly close above the five-week modified moving average at 45.25, and above the 200-week simple moving average at 44.95. My annual value level is 42.98 with a quarterly pivot at 46.03 and a monthly risky level at 48.61 vs. the March 19 high at 50.69. Source: Thomson Reuters
Table of ValuEngine Data on Large Banks