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Friday Earnings Watch: More than Banks

Markets may express relief now that Friday is here. Stocks will kick off the quarterly earnings seasons from financial institutions posting results. Since Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (WFC), and Bank of America (BAC) traded near 52-week highs ahead of results, markets will pay little attention to results.

Readers should look at Morgan Stanley (MS) today instead. MS stock plunged by 5.25% on Thursday, on a WSJ report that the bank’s wealth management unit faces an investigation from several federal agencies. The SEC and OCC are among the agencies probing for MS’s complicity in money laundering activity with wealthy clients.

In the month ahead, high-flying technology firms will post results. So long as they either post modest growth or issue an upbeat outlook, expensive firms like Super Computer Micro (SMCI) and Nvidia (NVDA) are unlikely to fall. Tesla (TSLA) already confessed to electric vehicle supply exceeding demand. However, CEO Elon Musk gave bulls the hope it needed. He said to look out for a Robotaxi announcement four months from now (in August).

Although media reported that Tesla canceled an inexpensive Tesla 2 model, rumors re-circulated that the line-up is on the company’s road map. Realistically, a cheap Tesla would compete with the already inexpensive Tesla 3. It also hurts sales of the premium Tesla X and S models.

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