Bank reports inconsistent
Wall Street is barely moving
04/18/2023, 11:05 p.m
After the publication of the eagerly awaited further quarterly bank balance sheets, Wall Street has lost momentum. The indices close almost unchanged. Investors are critically eyeing indicators that can provide information about the Fed’s next steps.
Caution and waiting characterized events on Wall Street on Tuesday. The background to this is the reporting season, which is only gradually picking up speed, for which many analysts are not expecting anything good. At the same time, however, there are also concerns that the results will be too good, as this could encourage the US Federal Reserve to continue raising interest rates in the fight against inflation. In line with this, there were also comments from central bank circles that indicated that interest rates would continue to rise. The Dow Jones Index dropped minimally to 33,977 points, S&P 500 and the Nasdaq indices also moved very little and ended the day little changed.
At best, the fact that the Chinese economy grew more strongly than expected in the first quarter after the end of the corona-related restrictions had a slightly supportive effect. However, growth of 4.5 percent compared to the expected 4.0 percent was below average in a long-term comparison and is also below the announced annual target of around 5 percent. In addition, China’s industrial production in March just missed expectations.
Clearly better than expected data from the US real estate sector also provided no momentum – also because they also fueled concerns about further rising interest rates. The number of housing starts in March fell less sharply than feared.
The dollar put into reverse gear after the recent high, the dollar index lost a good 0.3 percent, the Euro rose to $1.0972. At the bond market less happened than on the three previous days, when prices had fallen significantly, i.e. yields had risen because good economic data had fueled interest rate hikes. This time the yield rose only on the short end, and only slightly, while longer market rates fell slightly.
The gentler dollar supported that gold price, which rose 0.7 percent or $14 to 2,005 a troy ounce. The oil prices showed little change in the run-up to the weekly supply data from an industry association.
Goldman Sachs and Johnson & Johnson weak
Further business figures from the financial sector provided light and shade after Citigroup, JP Morgan and Wells Fargo had already set the bar high with good figures in the previous week. For Goldman Sachs was down 1.7 percent. While first-quarter revenue fell short of market expectations, net income beat consensus guidance. However, revenue and profits showed a downward trend.
The Bank of America joined the ranks of positive annual reports. The bank took in more and also earned more than expected. However, the deposits closely observed after the past bank collapses of smaller institutions were just below the previous year’s value. The course rose by 0.6 percent. The Bank of New York Mellon (+1.5%) increased the quarterly profit by 29 percent, but deposits fell by 19 percent compared to the previous year, but compared to the end of the fourth quarter they increased slightly.
Johnson&Johnson lost 2.8 percent. The pharmaceutical company exceeded market estimates with its quarterly figures and also raised the forecast for 2023 and the quarterly dividend. However, Johnson & Johnson slipped into the red as a result of a multi-billion dollar settlement related to a lawsuit. Lockheed Martin increased by 2.4 percent. The armaments company performed better than expected.
Luminar Technologies increased by 4.8 percent. The supplier in the field of autonomous driving had announced a partnership with Taiwan-based TPK in order to be closer to the fast-growing Chinese market. Digital Brands fell by more than 20 percent. In his fourth quarter, the fashion designer slipped deeper into the red than feared.