Shares were lower at the start of Friday’s trading session, while shares in JPMorgan (JPM) rose as much as 6% after a strong earnings report to kick off a crucial earnings period.
About 40 minutes into Friday’s trading session, the S&P 500 (^GSPC) was down 0.3% The Dow Jones Industrial Average (^DJI) fell 0.5% and the tech-heavy Nasdaq Composite (^IXIC) fell about 0.5%.
JPMorgan (JPM) and Citi (C) shares rose, while Wells Fargo (WFC) shares were little changed and PNC Financial (PNC) sock was under pressure after each bank reported results ahead of Friday’s opening .
In early trading on Friday, JPMorgan stock was up 6%, while Citi was up 2.4% and Wells Fargo was little changed.
Economic data also got markets moving early Friday, with the University of Michigan’s preliminary view of consumer sentiment in April signaling a rise in consumer inflation expectations, which investors took as a sign the Federal Reserve needs to remain vigilant to keep interest rates high.
Consumer expectations for price increases next year rose to 4.6% from 3.6% last month, the report showed. Stocks gave up modest gains after the headlines.
“These expectations have fluctuated for four consecutive months, alternating between increases and decreases,” said Joanne Hsu, director of consumer surveys. “Uncertainty about near-term inflation expectations remains significantly elevated, suggesting that recent volatility in expected inflation for the year ahead is likely to persist.”
Overall, the report showed that sentiment was “essentially unchanged” in April as the index stood at 63.5 from 62 at the end of March. The data came about an hour after Fed Governor Chris Waller reiterated in a speech that inflation was “far too high.”
Elsewhere on the economic calendar, the monthly retail sales report showed sales slipped 1% in March while industrial production data came in better than expected.
The story goes on
“In total, [retail sales were] not quite as bad as we expected,” wrote Paul Ashworth, chief North America economist at Capital Economics, “may be enough to nudge the Fed into a final 25 basis-point hike in early May.”
The results of the banks shine
JPMorgan, the country’s largest bank by assets, saw its stock rise as much as 5% after revenue and earnings rose year-over-year.
Deposits, which are closely followed by investors this quarter after the collapse of three US banks in March, rose 1.5% at JPMorgan over the quarter. Compared to the same period last year, however, deposits fell by 7%.
In the release of the company’s results, CEO Jamie Dimon said: “The US economy remains on a generally sound footing – consumers are still spending and have strong balance sheets and companies are in good shape. But the storm clouds we have observed for the past year remain on the horizon and the turmoil in the banking industry is adding to those risks.”
JPMorgan Chase CEO Jamie Dimon arrives at the Senate Committee on Banking, Housing and Urban Affairs hearing entitled Annual Oversight of the Nations Largest Banks at the Hart Building on Thursday, September 22, 2022. (Tom Williams/CQ Appeal, Inc. via Getty Images)
Wells Fargo also reported revenue and earnings results that were up year over year, with first-quarter revenue exceeding $20.7 billion.
Consumer deposits were down 5% year-on-year, while commercial bank deposits were down 15% from the first quarter of 2022. Wells Fargo reported that its commercial loans increased 15% from the year-ago period.
Wells Fargo CEO Charlie Scharf said in a press release, “We are pleased that we have been in a strong position to support the US financial system during the recent events that have impacted the banking industry.”
Citi reported revenue and earnings up 7% and 12% year over year, respectively, and highlighted that its deposits ended the quarter at $1.3 trillion, “broadly flat” from a year earlier, it said the company in its press release. CEO Jane Fraser said the company’s performance came “despite the turbulent environment for banks.”
On the earnings side, BlackRock (BLK) results showed the impact of last year’s market turmoil on investors, as the company’s average assets under management fell below $9 trillion in the first quarter, compared to $9.7 trillion in the year-ago quarter. The wealth management giant’s revenue also fell 10% year over year to $4.24 billion.
“BlackRock is a source of stability and optimism for clients,” CEO Larry Fink said in a press release. “We help clients manage volatility and build resilience into their portfolios, while providing insights into the long-term opportunities presented in today’s markets.”
Elsewhere on the earnings calendar, shares of UnitedHealthcare (UNH) were lower in early trade after the company reported earnings that beat estimates and raised its full-year 2023 outlook.
Meanwhile, Boeing (BA) shares fell as much as 6% early Friday after the company announced it would halt deliveries for about 737 Max planes.
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