Will Regional Banks Finally Begin to Shine?

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This week is a big week for earnings.

Furthermore, PCE and GDP prints will also be closely watched. 

This week will be important in determining the tone leading to the Fed meeting next week and the midterm elections on November 8. 

As many investors will be watching tech earnings, many other bellwether companies are reporting and pivotal industries to watch, such as regional banks (KRE). 

One of the regional banks on our watchlist is Zion (ZION), one of the leading financial services providers in the Western United States. 

Zion dates to 1873, is headquartered in Salt Lake City, and has more than 400 branches.

Zion’s earnings indicate more about the regional economy’s health and provide a glimpse into what to expect from other regional bank stocks this quarter.

So, how did Zion do? Zion was up 4.2% on Monday, and here’s a more detailed look at what Q3 looked like for Zion, which reported after hours on Monday, and what Q4 might look like for regional banking.

Zion is primarily in 11 western states and offers a full range of banking services, including commercial and retail banking, wealth management, and private client banking.

The effects of the lending environment, rising interest rates, inflation, and macroeconomic issues affected the fee income and operational expenditures in a positive way.

The effects of the lending environment, rising interest rates, inflation, and macroeconomic issues positively affected the fee income and operational expenditures.

Zion’s share price has been hit hard recently. However, with rates expected to continue to rise, Zion should see an improvement in lending and operational margins. 

For Q3, ZION demonstrated the positive impact of solid loan growth and moderately higher interest rates, as their net interest margin strengthened to 3.24%, up from 2.68% a year ago.

Technically, ZION made a reversal low that confirmed pre-earnings. Should it get follow through, expect to see 48.00 as support and 52-54 resistance to clear.

The positive earnings from Zion are a step in the right-wrong direction. The regional banking sector has suffered significantly and is putting in daily higher bottoms and struggling to regain its 50-day moving average. 

Stay informed about what’s happening in the banking world as we head into the new year. Are you ready to take advantage of upcoming trading opportunities?

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Looking for Inflation in all the Wrong Places. Against All Odds Research 10-21-22

Mish discusses why the U.S. dollar might be one of the most important lead indicators in this appearance on Benzinga.

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With BNN Bloomberg, Mish discusses the markets as U.S. banks reported earnings and why it’s important to watch long term bonds and the stability investing in the sugar trade.

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ETF Summary

  • S&P 500 (SPY): 375 support and resistance 380
  • Russell 2000 (IWM): 170 support and 177 resistance
  • Dow Jones (DIA): 310 support; 317 is resistance
  • Nasdaq (QQQ): 275 support; 280 resistance
  • Regional banks (KRE): 59 support and 63 resistance
  • Semiconductors (SMH): Support at 181 and resistance at 190
  • Transportation (IYT): 205 support and 210 resistance
  • Biotechnology (IBB): 119 support and 124 resistance
  • Retail (XRT): still holding long-term support at 55 and resistance at 62

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

Wade Dawson

MarketGauge.com

Portfolio Manager

 

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