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Alcoa and 'Too Big to Fail' Banks Key Next Week's Earnings

Alcoa ($7.71) set a new multi-year low at $7.63 on Wednesday as EPS estimates were cut by a penny to 9 cents per share. My annual value level is $5.23 with a weekly pivot at $7.90 and monthly risky level at $8.23.

Family Dollar ($63.32) appears to have established a trading range from $65.82 on May 15 down to $59.30 on June 4. My monthly value level is $57.38 with the 200-day SMA at $62.39, a weekly pivot at $62.99 and quarterly risky level at $70.03.

Yum! Brands ($71.12) appears to have established a trading range from $73.89 on June 10 down to $67.06 on June 24 versus the 200-day SMA at $68.25. My monthly value level is $65.53 with a weekly pivot at $71.04 and semiannual risky level at $73.12. Keep in mind that business at Kentucky Fried Chicken in China has been hurt by quality control issues.

When reviewing the earnings reports from regional and community banks, note that the FDIC in presenting its Quarterly Banking Profile for Q1 2013 cautioned that net interest income has narrowed and that growth in loan demand remains slow. In addition, the recent sharp rise in U.S. Treasury yields is a potential drag on earnings for banks that face mark-to-market issues on securities held for trading versus those held to maturity.

Commerce Bancshares (CBSH - Get Report) ($44.07) set a multi-year high at $45.18 on Wednesday as EPS estimates were raised a penny to 72 cents a share. My monthly value level is $41.48 with a semiannual risky level at $47.20.

Bank of the Ozarks (OZRK - Get Report) ($44.59) set its 2013 high at $45.70 on May 22. My semiannual value level is $41.09 with an annual pivot at $43.44 and monthly risky level at $46.27.

When evaluating the earnings reports from any of the four 'too big to fail' banks remember that their balance sheets are so huge that accounting flexibility will usually result in an earnings beat.

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OZRK $36.82 0.88%
YUM $79.20 -1.60%
AA $14.48 0.70%
CBSH $41.80 0.07%
FDO $78.79 0.11%


DOW 17,901.03 -234.69 -1.29%
S&P 500 2,078.48 -22.56 -1.07%
NASDAQ 4,940.3550 -42.4540 -0.85%

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