Bank Earnings Clear Path for Record Highs in US Stocks

Bank earnings demonstrate that the US economy likely has enough forward momentum to overcome recent energy supply disruptions and a short oil price shock. It’s a green light for stocks to extend their rally to new highs.

Estimates for US economic growth from the Atlanta Fed’s GDPNow tracker are a bit worrying — slowing to 1.3% from over 3% initially estimated for last quarter’s data. While big bank earnings support a better-than-expected outlook, some of the details indicate a slowdown is in the works.