Bank of America Beats Estimates

Bank of America Corp. (BAC) beat estimates on both the top and bottom lines, which doesn't come as much of a surprise after JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) both had solid quarters. Bank earnings are especially important for investors to monitor as Wall Street ponders whether or not the U.S. is at the peak of the economic cycle. Key areas to highlight in bank earnings are net interest margin expansion resulting from higher interest rates, which helped propel some of the big banks to earnings beats, and loan volume, which could fall as a result of higher rates. But JPMorgan reiterated loan growth guidance for fiscal year 2018 of 6% to 7%, an encouraging sign, while its net interest margin expanded 5 basis points. Meanwhile, Wells Fargo not only saw net interest margins expand, but car loan loan growth was 10%. Bank of America's story wasn't much different. 

Still, I think investors should be wary, and indeed bank stocks aren't exactly soaring. If loan demand is to fall as a result of rising interest rates, that may not show up on earnings reports until next quarter. The Federal Reserve raised rates just last month for the third time this year. Let's keep watching the loan growth story before piling into bank stocks. 

Nvidia's Strategy 

Nvidia Corp.  (NVDA) reports earnings in early November. But this stock is almost always priced for perfection, as seen by not only what Bill Studebaker told me in August, but also its price-to-earnings ratio of 35. TheStreet's Jim Cramer said at his teach-in event Saturday, "I think Nvidia is going to miss the quarter." So here's the trading strategy for Nvidia at Action Alerts Plus: AAP sold all of its Nvidia shares, and if Nvidia misses expectations on its upcoming earnings report the stock will likely fall and AAP will buy it back. Let's not forget Nvidia has a long runway for growth. Its autonomous driving segment has huge upside as does its gaming segment, two of its largest segments. Just some food for thought heading into Nvidia earnings. 

Netflix Earnings 

Netflix Inc. (NFLX)  will report earnings Tuesday, Oct. 16. It missed estimates in its July quarter and slashed its guidance. The stock is down 15% since the July quarter report, and TheStreet's tech columnist Eric Jhonsa said the bar for Netflix was now set lower. Netflix is still a growth stock, and its international market opportunity is huge since the world hasn't adopted streaming as much as it has been adopted in the U.S. The market is still trying to place just how highly Netflix should be valued. 

JPMorgan is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells JPM? Learn more now.