Dow Jones Industrial Average
It was lower on Friday after major US banks reported fourth-quarter earnings. The market doesn’t seem to be taking the reports too lightly – and the economic data is disappointing either.
The Dow Jones index fell 327 points, or 0.9%, on Friday morning, after the index fell 176 points Thursday to close at 36,113 points. the
Standard & Poor’s 500
And fell 0.5 percent, while heavy technology
— which fell 2.5% on Thursday as tech stocks in particular came under pressure — was down 0.2%.
c. B. Morgan Chase
(Stock ticker: JPM) posted earnings of $3.33 per share, beating estimates of $3.01 per share on revenue of $30.35 billion, and beating expectations of $29.9 billion. The bank issued $1.8 billion in loan loss reserves, without which the company would have missed earnings estimates. The stock fell 5.9% after rising 5.7% for the month driving a profit.
(WFC) reported earnings of $1.38 per share, topping estimates of $1.13 per share on revenue of $20.9 billion, and beating expectations of $18.8 billion. The stock gained 3.3%. The stock is up 14.5% for the month resulting in a profit.
The company cited “weak demand” as one of the reasons for the decline in loan balances. Although the company didn’t expand on that in its earnings statement, markets didn’t want to see higher interest rates coinciding with weak loan demand.
(C) reported earnings of $1.46 per share, beating estimates of $1.38 per share, on revenue of $17 billion, above expectations of $16.8 billion. The bank’s loans totaled $668 billion, down 2.5% year-on-year.
Citi shares fell 2.5 percent after rising 9 percent in the month, which led to profits.
Markets were sifting through economic data on Friday. Retail sales fell 1.9% month over month in December, missing expectations for a 0.1% decline and reversing sharply from a 0.3% rise in November.
Jamie wrote: “While the overall level of retail sales is high and remains strong, the December index is likely to be influenced by consumers who buy early, fearing well-published reports of supply shortages, delivery concerns and the inability of retailers to deliver merchandise in time for Christmas. “. Cox, managing partner of Harris Financial Group.
The sharp drop in retail spending seems very reasonable. Core retail spending was running at an annual rate of nearly $420 billion in late 2021, according to 22VResearch. This is about 25% higher than the pre-Covid trend, so in recent months it has been declining again.
That’s not a great sight for stock investors, but markets will be watching to see if poor retail sales results become an issue for broader economic growth or if it means consumers are beginning to shift their spending from goods to services, the results of which have been hit by the pandemic.
“The retail sales number was ugly, and it’s not going to get around,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.
Industrial production fell 0.1% on the month in December, less than expectations for a 0.3% rise.
The stock market is in the process of reversing the higher interest rates and less liquidity being pumped into the markets from the Federal Reserve, which is now expected to raise interest rates three times this year and reduce the size of its balance sheet at some point to combat inflation.
The interest rate market now reflects a 96% chance that the first hike will be in March, up from 90% just days ago. Citigroup economists wrote that the market expects three to four highs this year.
While interest rates across the board have already gone up, the stock market still reflects risks to economic growth. The S&P 500 is down 3.8% from its all-time high, which it hit earlier in the month.
Tom Essay, founder of Sevens Report Research, wrote that the Fed’s recent shift toward tighter monetary policy “complements, frankly, what is the most hawkish about Fed policy I’ve seen in my career.”
Not surprisingly, value stocks, by far the most economically sensitive, were below growth and tech names on Friday. Financial data is taking a hit – the sector accounts for a large portion of stocks with a large market capitalization.
Financial Sector Definition SPDR
The exchange-traded fund (XLF), which is up more than 4% for the year through Thursday, fell 1.4% on Friday. This causes the
Vanguard S&P 500 . Value
ETF (VOOV) is down 0.6% because the financial sector is the fund’s largest sector, accounting for nearly a quarter of the fund’s total market capitalization.
But it wasn’t just about financial companies.
Without the gains in technology, the indicators would be significantly lower. the
Invesco S&P 500 . equal weight
The exchange-traded fund (RSP), which weighs every share in the index equally, was down 0.8%. This is worse than the normal index, as its movements are strongly influenced by companies with larger market capitalizations.
Hong Kong fell 1%
Hang Seng Index
It ended 0.2% lower.
In the field of commodities, crude oil prices continued to rise. West Texas Intermediate crude futures rose 1.2% to exceed $83 a barrel.
Cryptocurrencies were broadly lower.
The leading cryptocurrency is down more than 3% in the past 24 hours to below $42,500, according to data from CoinDesk. smaller counterpart
It’s down 3% along with it to about $3,250.
—The “joke” icon has received high-profile attention from
CEO Elon Musk et al – up 14%; Tesla will start accepting cryptocurrency for payments for goods.
Here are seven stocks on the move on Friday:
(SAP) rose 1.7% after the German software group reported that revenue from its cloud computing business rose 28% last quarter.
(PFE) fell 1.8%, 3.3%, and 1.1%, respectively, after the Supreme Court barred the Biden administration’s mandate for a vaccine for companies with 100 or more workers.
Boston Bear Company
SAM stock fell 9.5% after the company cut its earnings forecast.
Las Vegas Sands
(LVS) jumped 13%; Shares in the casino giant are up this week as some analysts see a brighter future for the stock in 2022 after last year’s poor performance. Peers
(WYNN), which faced similar pressures in 2021 — including regulatory concerns from China — rose 6.7%.
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