Can A Potential Pre-Earnings Bank Rally Save The Dow Jones From Tumbling?

The financial sector (ARCA: XLF) is set up for a very interesting 2024. We are focused on two names within the sector: Goldman Sachs (NYSE: GS) and Bank of America (NYSE: BAC). Both companies have earnings this week, with Goldman Sachs reporting on Tuesday morning (the 16th) and Bank of America reporting on Friday morning (the 12th). The Dow Jones Industrial Average (ARCA:DIA) will be interesting to watch, considering Goldman is the second largest name in the index. 

Goldman’s report will probably decide whether the Dow Jones can continue its all-time high run or break further down after a huge November-December rally. However, we have noticed that the big banks love to have pre-earnings run up this time of year before the actual report. In 2023 and 2022, Goldman rallied 7 percent and as high as 8 percent, respectively, the week before the earnings call. We have a Goldman weekly chart below highlighting these rally areas for the last four years at the beginning of the year.

Looking at Bank of America, the same thing applies. In 2023, Bank of America rallied about 4 percent the week before earnings, and in 2022, the stock rallied nearly 12 percent the first ten days of January before the earnings call on the 19th.

Do you think that trend will continue this week, with big banks rallying before earnings? Let us know what you think! 

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