NEWS
The Market’s Eye Turns To CPI

Markets were mixed ahead of tomorrow’s consumer inflation data, one of the few data points left before next week’s Fed decision. As for today’s performance, banks and oil stocks came under pressure, while consumer discretionary and technology were firmly in the green. 👀

Today's issue covers why bank stocks sank, GameStop CEO Ryan Cohen’s latest games, and why consumer discretionary stocks could begin to outperform. 📰

Here’s the S&P 500 heatmap. 7 of 11 sectors closed green, with real estate (+1.77%) leading and energy (-1.72%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $QH, $IZEA, $VRDN, $FBLG, $NRBO 📉 $ALLY, $BOOT, $SMX, $IONS, $PLAY*

*If you’re a business and want to access this data via our API, email us.

STOCKS
Bank Stocks Give Back Some Gains 💸

U.S. regulators unveiled plans to propose new capital requirements half as burdensome as their original plan, which should have been positive for the banking sector. However, the sector’s largest stocks tumbled after offering cautious outlooks at Barclay’s Global Financial Services Conference in New York. ⚠️

JPMorgan Chase said the bank is on pace to hit all its net interest income and expenses targets this year but warned analysts are a bit too optimistic about how much it will earn in 2025. The bank's COO echoed the CEO and CFO's commentary that the bank has been ‘overearning’ in recent quarters.

Bank of America told investors that investment banking fees will be ‘basically flattish’ YoY, with trading ‘up low single digits.’ Net interest income already troughed in the second quarter and should rebound. As for Berkshire Hathaway selling shares of the bank, CEO Brian Moynihan said he doesn’t know why the firm is doing this but appreciated it being an investor to help stabilize the company when it needed it most.

Goldman Sachs CEO David Solomon said trading revenue is expected to fall 10% YoY during the third quarter. It will also take a $400 million pre-tax earnings hit from its credit card partnership with GM as the bank continues to offload the rest of its failed consumer business. As for its bread and butter, the company did not share expectations about investment banking fees. Instead, Solomon said, “I feel very good about the way the firm’s positioned.”

Citigroup said credit costs are expected to rise by $200 million from the second quarter, with trading revenue down 4% YoY. Meanwhile, investment banking revenue should be up 20% YoY, as it completes four consecutive quarters of growth in that business.

Ally Financial fell sharply after warning that its consumers are under stress. CFO Russell Hutchinson said, “Over the course of the quarter, our credit challenges have intensified. Our borrower is struggling with high inflation and cost of living and now, more recently, a weakening employment picture.”

Popular financial sector ETF ($XLF) was down just over 1% on the day, with Stocktwits sentiment falling into ‘bearish’ territory on the news. 🐻

Financials have been a strong outperformer this year, but bank executives continue to warn that they may be unable to reproduce their recent stellar results. Investors seemed to think otherwise, at least until today. 😬 

As always, time will tell. But for now, all eyes are on next week’s Fed interest decision and the next set of bank earnings beginning on Friday, October 11th.

STOCKTWITS “TRENDS WITH FRIENDS”
What’s In Store For A Seasonally-Weak September 🧐