Dow Jones closes in positive territory
Solid banking business calms stockbrokers
01/13/2023 11:02 p.m
Inflation is gradually losing its terror, consumer sentiment is rising and the business figures of financial institutions are nothing shocking either. While these developments don’t send prices skyrocketing, they do provide stability on Wall Street.
Investors on Wall Street have remained on guard as the US accounting season kicks off. the Dow Jones Index the standard values increased slightly by 0.3 percent and rose to 34,302.16 points. The broader one S&P 500 and the Index of the Technology Exchange Nasdaq lost 0.1 percent each to 3999.09 and 10,079.16 points. The business figures presented by the major US financial institutions did not arouse any euphoria, but there were also no nasty surprises.
“Banks’ results were solid,” summarized banking analyst Peter Torrente of KPMG. While on the one hand increasing risk provisions for possible loan defaults and a weakening business with mergers and acquisitions (M&A) burdened the results, on the other hand the financial institutions benefited from higher interest income.
The industry leader JP Morgan increased profits by six percent to eleven billion dollars. After initial losses, the shares even turned positive and were around two percent higher. Citigroup was also up 1.5 percent, while Wells Fargo and Blackrock were slightly weaker. “There were no disastrous bank reports,” said Art Hogan, chief markets strategist at B. Riley Financial. “To summarize, University of Michigan consumer sentiment is stronger than expected, painting a picture of an economy that may be slowing but is certainly not crashing.” Big bank profits are seen as a key test of US corporate strength amid sharp Federal Reserve rate hikes.
So far, falling inflation rates have encouraged investors at the start of the year. According to a survey by the University of Michigan, US consumers only expect inflation for goods and services of 4.0 percent over the next twelve months. The US inflation rate fell to 6.5 percent in December from 7.1 percent in November.
Car prices are under pressure
The sixth straight decline gives the Fed scope for a less aggressive monetary policy stance. On the markets, speculation on monetary policy decisions – which had shaped buying decisions in recent weeks – will now give way to a return to the company’s fundamental data, said Jochen Stanzl, market analyst at the trading house CMC Markets. “Upside surprises on the corporate side could be the next catalyst for the stock market rally.”
price cuts at Tesla for customers in Europe and the USA, the shares of the electric car manufacturer slipped by 1.25 percent. Industry experts see the discounts as a signal that car prices are coming under pressure after two years of high increases. “We expect the price cycle to run out of steam,” said analysts at Bernstein Research. In Europe, due to the high order backlog, this will only be noticeable in the second half of the year.
The papers from Delta Airlines fell 3.55 percent after a gloomy outlook. The airline expects earnings below analyst estimates in the first quarter. Investors flocked to UnitedHealth after higher-than-expected earnings. The shares of the US health and insurance group rose by 1.5 percent. Adjusted earnings per share for the quarter were $5.34, down from analyst estimates of $5.17. The health insurance ratio, the ratio of premiums to claims payments, also improved.