Financials continue to rally in wake of reports of less damage than expected in Florida from Irma

Financials continue to rally in wake of reports of less damage than expected in Florida from Irma

Yesterday forecasts of lower than expected damage from Hurricane Irma were enough to light a fire under shares of insurance companies, the Financial Select Sector SPDR and the market as a whole. Today even a warning from Citigroup that trading revenue would fall 15% in the third quarter has been enough to derail the upward trend in financials.

Earnings worries move to the fore today

Today marked the official turn in financial market attention from central banks and interest rates to the upcoming–and likely disappointing–U.S. earnings season. Projections are that earnings of the stocks in the Standard & Poor’s 500 stock index will see a year over year decline in earnings of 7% to 7.4%, depending on your data source preference.

Last week’s momentum rout doesn’t seem over, downtrend spreads to consumer discretionary and financial sectors

For a while this morning, it looked like the momentum sell off from the end of last week might be over. Such momentum leaders as Netflix (NFLX), Tesla (TSLA), and Yelp (YELP) were all in the green shortly after trading began at 9:30 a.m. New York time. But my mid-afternoon—2:15 p.m. to be exact—most of this group had returned to the red

Earnings season starts today–all eyes will be on guidance, especially for the financials

Earnings season for the second quarter starts officially today when Alcoa reports. Analyst estimates call for S&P 500 earnings growth of just 1.8% this quarter. Far and away the highest expectations are for the financial sector where earnings are projected to grow by 17%. Take away that performance by financials and earnings growth for the rest of the S&P 500 is projected to drop by 1%.