Yesterday forecasts of lower than expected damage from Hurricane Irma were enough to light a fire under shares of insurance companies, the Financial Select Sector SPDR (XLF) and the market as a whole. Yesterday shares of Swiss RE and Munich RE, two re-insurers that would have taken a beating if damage came close to the $200 billion at the high end of forecasts, rose 4.2% and 4.1%, respectively. First line insurers Prudential Financial and Allstate, on the hook for storm damage to homes from wind and water, climbed 2.5% and 1.8%, respectively.
Today even a warning from Citigroup (C) at an investment conference yesterday that trading revenue would fall 15% in the third quarter of 2017 from the third quarter of 2016 has been enough to derail the upward trend in financials. The Financial Select SPRD ETF (XLF) rose another 1.12% as of 3:10 p.m. New York time. Shares of Citigroup were up 1.86% at that time in New York trading.
Shares of JPMorgan Chase (JPM), Goldman Sachs (GS), and Morgan Stanley (MS), which all look set to report significant drops in trading revenue for the third quarter, were up 1.28%, 2.14%, and 1.09%, respectively.
In the second quarter the big banks posted an average 17% year over year decline in trading revenue.
Citigroup and JPMorgan Chase kick off third quarter earnings reports for the banking sector on October 12.