Wall Street Brunch: Earnings Offer Certainty In Volatile Week To Come (NYSE:JPM)

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President says ‘don’t worry’ as China says it won’t back down. (0:17) Big banks to report in Q3 earnings curtain-raiser. (1:22) Warner Bros. reportedly rejects Paramount bid. (2:24)

It’s not often that the start of earnings season gets lost in the shuffle. But along with the continuing government shutdown, Wall Street is riding the rollercoaster of U.S.-China trade.

President Donald Trump appeared to flip the China script again on Sunday, downplaying tensions.

On Friday said he will institute 100% tariffs on China due largely to their recent restriction of rare earth exports. China took a page out of the Tom Petty songbook on Sunday, saying it “won’t back down” and is not afraid of a tariff war. Then Trump channeled Bobby McFerrin and said don’t worry, President Xin Jinping just had a “bad moment” and the U.S. “wants to help China.”

Crypto, which had been rallying after Vice President J.D. Vance said Trump is willing to be a reasonable negotiator with China, popped further today. Bitcoin (BTC-USD) is up +3%.

Meanwhile the government shutdown enters its third trading week. Prediction markets say the shutdown is now expected to last more than 30 days, nearing the record of 35.

This weekend, the administration sent layoff notices to thousands of federal workers — though some were later reversed. The Treasury and Health and Human Services departments were hit the worst.

So, lots of ingredients for a volatile Columbus Day, which is not a market holiday.

But for those who can tune out the noise there will lots of numbers to assess as companies start to report earnings in earnest – starting with the Big Banks.

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS), Wells Fargo (WFC), BlackRock (BLK), Citigroup (C), Bank of America (BAC) and Morgan Stanley (MS) are all set to issue results.

JPMorgan Chase is up Tuesday, with analysts expecting EPS of $4.87 on revenue of $45.57 billion. Analysts say JPM’s investment thesis centers on robust credit card growth, resilient investment banking momentum and guidance for higher net interest income.

Goldman Sachs also reports Tuesday, with the forecast for EPS of $10.62 on revenue of $14.13 billion. Goldman’s investment banking and FICC financing segments are showing robust growth, while its Asset & Wealth Management business is expanding, especially in alternative assets.

Also on the earnings calendar:

Fastenal (FAST) reports Monday.

Tuesday sees J&J (JNJ), JPMorgan, Wells Fargo, Goldman Sachs, BlackRock and Citigroup

Bank of America, Morgan Stanley (MS) and Abbott Labs (ABT) weigh in on Wednesday.

Schwab (SCHW), Bank of NY Mellon (BK) and U.S. Bancorp (USB) issue results Thursday.

Friday brings American Express (AXP) and State Street (STT).

Elsewhere in the news this weekend

The potential tie-up between Warner and Paramount is still stuck in development.

Bloomberg says Warner Bros. Discovery (WBD) turned down an initial acquisition offer from Paramount Skydance (PSKY) as being too low at around $20 a share.

But rather than a deal fading to black, the two companies look to be walking between scenes.

Paramount, now led by David Ellison, is said to be weighing several options to keep its pursuit alive, including raising the offer price, appealing directly to Warner shareholders or bringing in a financial backer (rumored to be Apollo Global) to strengthen its bid.

For income investors, AbbVie (ABBV) and Abbott Labs (ABT) go ex-dividend on Wednesday. AbbVie pays out on Nov. 14 and Abbott Labs pays out on Nov. 17.

Delta Air Lines (DAL) goes ex-dividend on Thursday, paying out on Nov. 6.

Colgate-Palmolive (CL) goes ex-dividend Friday, with a Nov. 14 payout date.

Over in the Wall Street Research Corner, this past week we’ve given you some of J.P. Morgan’s top short ideas in the Consumer and Tech sectors. And if you believe Friday was the start of a larger selloff here are a few more names to chew on in Telecom, Media and Financials.

Analysts point to vulnerability in SiriusXM (SIRI) due to Average Revenue Per User dilution and subscriber losses, and Bumble (BMBL), with margins shrinking as marketing resumes.

Travelers (TRV) makes the list with a cautious outlook for the commercial lines market. And T. Rowe Price (TROW), whose business is disproportionately weighted toward active equities and whose valuation looks high.

And here’s a little something new this Wall Street Brunch — Easter Eggs Benedict. A piquant story from the past week that got Seeking Alpha users clicking.

The Air Jordan Economy shows no signs of coming down to Earth.

Nike (NKE) scored one of the biggest coups in retail history when it signed Michael Jordan to a $2.5 million endorsement deal in 1984 and created an entire marketing strategy around a single athlete.

Now the Jordan Brand is estimated to be worth more than $10 billion and Nike recently opened ​a new World of Flight store in Philadelphia.

That’s the Jordan Brand’s sixth flagship retail location and the first in a bold U.S. expansion plan. The other five locations are Mexico City, Beijing, Seoul, Tokyo and Milan.