Tough crowd. 

The world's biggest banks left it all on the field in the first-quarter to try and appease the insatiable appetite of investors. At first glance, the whales in the space such as Goldman Sachs (GS) , JPMorgan & Chase (JPM) , and Bank of America (BAC)   delivered and then some. Nice earnings beats, solid improvements in return metrics, strong revenue from trading desks and promises to buy back even more stock. 

Yet, the market has yawned, raising the fear that equities valuations may have reached a near-term top. The KBW Bank Index lagged the S&P 500 index for the third straight session on Tuesday. Goldman's stock fell 1.6% after releasing better-than-expected results in the morning.

The KBW Bank Index remains below both its 50-day and 100-day moving averages (see below). 

Source: Bloomberg
Source: Bloomberg

For many on Wall Street, the strong bank earnings were priced in months ago. Now, the movers and shakers are wondering what's next now that market volatility has normalized this quarter.  

"[Investors are saying] there was great volatility - we know that from what happened in February - and is this what you got?" says TheStreet's founder and Action Alerts PLUS portfolio manager Jim Cramer. 

Not everyone is convinced the market's muted reaction to bank earnings is a sign of lurking danger. 

Canaccord Genuity chief market strategist Tony Dwyer tells TheStreet investors need to relax with bank earnings fears. The longer term charts on the financials continue to bullish and the economic fundamentals remain solid, Dwyer stresses.

Before You Go

Get ready for the must-attend investing conference of 2018, hosted by none other than TheStreet's Jim Cramer. From an exclusive interview with PayPal CEO Dan Schulman to expert panels that touch on investing in the stock market to alternative investing, you won't want to miss the event TheStreet is hosting on May 5. Details are below.
Canaccord Genuity's Tony Dwyer will be one of the featured speakers at the event.
How to Diversify Your Portfolio: A Boot Camp for Investors
  • Date: Saturday, May 5, 2018
  • Location: 117 West 46th Street, New York City
  • Register here