Stock futures were muted Thursday morning as investors awaited quarterly earnings results from some of the biggest U.S. banks.
Dow Jones Industrial Average futures rose 26 points. S&P 500 futures were flat while Nasdaq 100 futures added 0.1%.
In regular trading Wednesday, the Dow advanced about 344 points, or 1% as earnings season got underway with results from Delta and JPMorgan Chase. The S&P 500 and Nasdaq Composite rose 1% and 2%, respectively, each snapping a three-day losing streak.
Still, the S&P 500 is down 0.9% for the week on inflation fears as a Tuesday CPI report showed price increases not seen since 1981. The Nasdaq Composite is off by 0.5% and the Dow is down 0.5% on the week. Trading is closed at the NYSE on Friday.
Twitter shares popped in premarket trading after Elon Musk offered to buy the social media company for $54.20 a share. Musk said this was his best and final offer for Twitter, which he said needs to be transformed privately in order to thrive.
On Thursday, Wells Fargo, Goldman Sachs, Morgan Stanley and Citigroup will post their first-quarter earnings. Investors will be monitoring how banks weathered macro headwinds during the quarter, particularly a flattening yield curve
JPMorgan shares lost more than 3% Wednesday after the company posted a $902 million charge for building credit reserves for anticipated loan losses, and $524 million in losses tied to Russia-linked market upheaval.
JPMorgan’s experience may not necessarily bode well for them, but there are still good signs for its Wall Street rivals. The company’s trading desks managed to take advantage of volatile markets created by the Ukraine conflict: The bank’s fixed income and equities operations posted about $1.3 billion more in revenue than analysts had expected.
JPMorgan also posted a boost in interest income from loan growth and rising rates, which is a good sign for consumer banking rival Wells Fargo. Wells has been an analyst pick this year for its greater-than-average sensitivity to rising rates.
“The bar is low for bank earnings with expectations for Q1 earnings declining about 1%,” said Stephanie Lang, chief investment officer at Homrich Berg. “Beating this low bar could move shares higher with the bright spot being net interest income as interest rates have moved higher.”
Traders are also waiting on the March retail sales figures due out at 8:30 a.m. ET. Retail sales are expected to have gained 0.6% for the month, according to the consensus estimate from Dow Jones.
IBM shares gained 2% in premarket trading after Morgan Stanley upgraded the old technology company, saying it was a “place to hide” amid growing economic uncertainty because of its resilient cybersecurity and analytics business.
Wednesday’s market reversal came after an initial batch of quarterly results from companies including Delta, Fastenal and and BlackRock, which came in better than expected. Investors have been eager to see how well companies have managed mounting inflationary pressures.
“Given the extreme level of geopolitical crisis [and] sharpest Fed pivot, the market has been resilient,” said Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs. “Returns are going to be lower but there is still an argument to be made for investing in equities – there is almost nowhere else to go. We will have to see how earnings go – how much companies talk about inflation, supply chain issues impacting margin, and rest of year outlook.”
“I believe that earnings are going to beat expectations yet again,” she added. “If this happens, we could see a reversal of these bearish daily trends.”
U.S. Bancorp, PNC Financial and Ally Financial are also scheduled to report earnings Thursday.
In other economic data, import prices and jobless claims are also set to come out at 8:30 a.m. ET.
— CNBC’s Hugh Son contributed reporting.
Source: https://www.cnbc.com/2022/04/13/stock-market-futures-open-to-close-news.html