Wall Street: The first results are disappointing


(CercleFinance.com) – Wall Street is expected to open slightly lower on Friday, as disappointing results from JPMorgan, Bank of America and Wells Fargo dampened the enthusiasm recently shown by investors.

Half an hour before the opening, the ‘futures’ contracts on the New York indices lost between 0.8% and 1.2%, announcing a start to the session in the red.

The financial sector should particularly weigh on the trend under the impact of lackluster results published by the major US banks.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo kicked off the fourth quarter earnings season this morning amid rising interest rates amid tighter monetary policy from the Reserve federal.

This environment does not really seem to have served them.

First bank of the United States, JPMorgan Chase reported a net profit up 6% to 11 billion dollars penalized by provisions for credit losses of 2.3 billion over the period.

The New York firm explains these provisions by a modest deterioration in its macroeconomic outlook, with now a slight recession in the central scenario.

Bank of America earned a net profit of $7.1 billion for the last three months of 2022, also hampered by large provisions for credit losses.

Wells Fargo unveiled for its part quarterly results penalized by a heavy burden related to regulatory and legal aspects.

Finally, Citigroup recorded a net profit of 2.5 billion dollars for the fourth quarter of 2022, a figure down 21% compared to the same period a year earlier, notably affected by the increase in the cost of credit.

Equity markets have regained some of their momentum since the beginning of the year, thanks to indicators that have reinforced the scenario of a ‘soft landing’ for growth.

To continue this New Year’s rally, investors now want to know if US companies also have any good surprises in store.

Goldman Sachs and Morgan Stanley will present their quarterly accounts next Tuesday, before other giants of the American economy, such as Procter & Gamble and Schlumberger, which will publish their results at the end of the week.

In terms of economic indicators, the Department of Labor announced this morning that import prices in the United States rose 0.4% last month, after falling 0.7% in November.

Export prices fell by 2.6% in December, after falling by 0.4% the previous month, which again confirms the trend towards a slowdown in US inflation.

The first results of the University of Michigan’s monthly survey of US consumer confidence will be released at the start of the session.

Copyright (c) 2023 CercleFinance.com. All rights reserved.



Source link -84