What Happened?
A number of stocks jumped in the afternoon session after the earnings season got off to a strong start as several big banks reported third-quarter results that surpassed Wall Street's expectations.
The positive results were driven by a rebound in investment banking and strong trading desk performance. JPMorgan Chase reported a significant jump in profit and revenue, boosted by increased trading and dealmaking. Similarly, Wells Fargo saw its shares climb after reporting strong net interest income and raising its guidance. Citigroup also exceeded revenue estimates across all its business lines. While Goldman Sachs also beat expectations, its shares dipped slightly on news of potential job cuts aimed at curbing costs. Overall, the strong reports from these financial giants suggest a healthy pickup in corporate activity and trading.
Also, Fed Chair Jerome Powell gave investors a major reason for optimism by suggesting the Fed could soon stop its quantitative tightening (QT) program. For months, this policy acted like a brake on the economy, systematically draining cash from the financial system to cool inflation. Powell's comments signal that the Fed may be ready to ease its pressure, which would leave more liquidity in the market to flow into assets like stocks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Regional Banks company Cadence Bank (NYSE:CADE) jumped 3%. Is now the time to buy Cadence Bank? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Banner Bank (NASDAQ:BANR) jumped 3.3%. Is now the time to buy Banner Bank? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Banc of California (NYSE:BANC) jumped 3.6%. Is now the time to buy Banc of California? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Atlantic Union Bankshares (NYSE:AUB) jumped 4.6%. Is now the time to buy Atlantic Union Bankshares? Access our full analysis report here, it’s free for active Edge members.
- Thrifts & Mortgage Finance company Northwest Bancshares (NASDAQ:NWBI) jumped 4.5%. Is now the time to buy Northwest Bancshares? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Atlantic Union Bankshares (AUB)
Atlantic Union Bankshares’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 3.9% on the news that investors reacted to escalating trade tensions between the US and China following President Trump's announcement of a potential 'massive increase' in tariffs on Chinese imports. Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions and ahead of an anticipated meeting between the US and Chinese presidents.
Atlantic Union Bankshares is down 2.6% since the beginning of the year, and at $36.01 per share, it is trading 17.3% below its 52-week high of $43.55 from November 2024. Investors who bought $1,000 worth of Atlantic Union Bankshares’s shares 5 years ago would now be looking at an investment worth $1,512.
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