The third quarter earnings season begins this week with the first of the big banks set to report tomorrow morning.  One feature of our Earnings Explorer tool is an interactive earnings calendar with detailed information on stocks set to report earnings in the days, weeks, and months ahead.  Below is a snapshot of the calendar showing expected earnings reports through Wednesday morning.  Notably, Citigroup (C) and JP Morgan (JPM) will report tomorrow morning, while Bank of America (BAC), Goldman Sachs (GS), and Wells Fargo (WFC) will report on Wednesday morning.

You can dig deeper into individual stocks with our Earnings Explorer tool to see their historical earnings reports and how investors reacted.  Below we show aggregate earnings snapshots for both Citigroup (C) and JP Morgan (JPM), which report tomorrow ahead of the open.

Notably, the Q3 earnings release for Citigroup has seen the stock average a one-day gain of 0.87% in reaction to the news.  That’s a better share price response than any other quarter.  Following its historical Q4 earnings releases, for example, Citi shares have been very weak with an average one-day decline of 2.39%.

While Q3 earnings have been okay for Citigroup in terms of share price reaction, it has been the worst quarter of the year for JP Morgan (JPM) historically.  Over the last 19 years, JPM has averaged a one-day decline of 0.73% on its Q3 earnings reaction day with positive returns just 26% of the time.

Bank of America (BAC) has the worst numbers of the five big banks reporting this week when it comes to share price reactions to earnings.  As shown below, the stock has averaged a decline of 1.03% on its 76 earnings reaction days since 2001 with positive returns just 42% of the time.  Goldman Sachs (GS) has also struggled on earnings historically with its share price rising in reaction to the news just 39% of the time.  Goldman’s Q3 report, however, has been a bit more bullish with the stock averaging a one-day gain of 0.44% in reaction to past third quarter earnings releases.  Finally, Wells Fargo (WFC) is also set to release Q3 earnings on Wednesday, and the stock has only gained in reaction to past Q3 releases 32% of the time.  Try out our Earnings Explorer tool for free with a two-week trial to Bespoke Institutional.

Tim Russert used to sign off from each week’s episode of Meet the Press with the tagline, “If it’s Sunday, it’s Meet the Press.”  Borrowing from that phrase, the Nasdaq’s tagline might as well be “If it’s Monday, it’s Meet the Nasdaq.”  With a gain of over 3% today, the Nasdaq is doing what it always does on Mondays – rally!  The chart below shows the year-to-date performance of the Nasdaq so far in 2020 as well as its performance if you only owned the index on Mondays.   Year to date, the Nasdaq is up an impressive 32.7%, putting it on pace for the first back-to-back annual gain of over 30% since 1998 and 1999. Even crazier, though, is the fact that the Nasdaq is up over 20% year-to-date on Mondays alone!  The weekday that most people love to hate has been responsible for more than 60% of this year’s Nasdaq gain.

In the table below we summarize the performance of the Nasdaq by weekday so far in 2020.  Monday’s average daily gain of 0.57% with gains more than 75% of the time is both the best average daily return and the most consistent to the upside.  Tuesdays and Wednesdays haven’t been particularly bad for the Nasdaq either.   Both days have seen an average one-day gain of 0.30% or more, and Wednesday has been positive three-quarters of the time.  While the first three trading days of the week have been strong, Thursday and Friday have been days to forget.  Although both days have also experienced positive returns more than half of the time, the average one-day change for both is negative resulting in declines on a cumulative.  Thursday has been the weakest with a cumulative decline of 11.53% while Friday’s cumulative decline has been more modest at just 3.46%.  TGIM.  Click here to view Bespoke’s premium membership options for our best research available.

Although a very busy news week made up for it, last week was uneventful on both the earnings and economic data front.  In terms of earnings, only eight companies reported, and for economic data, as shown below, there weren’t even a dozen releases.

This week is another story.  On the economic data front, there are more than two dozen releases crammed into Tuesday through Friday (there are no scheduled releases for today due to the Columbus Day holiday).  Small business optimism will be the first release of the week early Tuesday morning.  CPI will be out later in the day with PPI following up on Wednesday morning.  Tuesday will also see manufacturing readings from the Philly and New York Fed, and we’ll get the usual Thursday weekly releases like jobless claims and Bloomberg Consumer Comfort.  Friday closes out the week with retail sales, industrial production, University of Michigan sentiment, and TIC flows all on the docket.

Not only is economic data ramping up but so too are earnings.  Whereas last week only saw 8 earnings reports, this week there are over ten times that number as earnings season kicks off with some of the big banks like Citi (C) and JPMorgan Chase (JPM) reporting.  As shown in the snapshot from our Earnings Explorer below, the following three weeks will only see the number of companies reporting accelerate with peak earnings season in the first week of November.  Click here to view Bespoke’s premium membership options for our best research available.

With COVID case counts on the rise throughout the country, you would think that Americans would be a bit more concerned about getting on airplanes.  Rather than hunker down, though, Americans have been increasingly spreading their wings.  The latest passenger throughout numbers released by TSA showed that on Sunday 984,234 passengers went through security checkpoints at US airports.  That was the highest single-day reading since March 16th.  This weekend’s air passenger traffic also helped to push the 7-day average of traffic to new post-COVID highs.  After rising and then falling back down after the Labor Day holiday, air passenger traffic has ‘surged’ in recent days to push the current 7-day average up to 819,384 passengers per day.

Air travel has been on the rise, but the term surge may be too strong.  When we compare air passenger traffic levels to where they were a year ago, we’re still down over 65% on a 7-day average basis.  Even yesterday’s strong passenger numbers were still down over 61% from their same levels last year.  In other words, there’s still a lot of room for improvement!  The chart below compares the y/y change in passenger throughput to the performance of the Airline ETF (JETS) since the start of the pandemic.  Not surprisingly, there has been a pretty strong correlation between the two as increases in passenger traffic have been accompanied by rallies in the airlines and vice versa.  Click here to view Bespoke’s premium membership options for our best research available.