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Stocks rise to end three-day losing streak as traders eye earnings

Stocks rise to end three-day losing streak as traders eye earnings

U.S. stocks gained on Wednesday as investors monitored a series of closely watched earnings reports and further digested a hot print on inflation in the U.S.

The S&P 500 jumped by more than 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, ending a three-day losing streak. The Nasdaq Composite outperformed and rose 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as technology shares jumped and Treasury yields pulled back across the curve.

Investors received a number of quarterly reports from some major U.S. companies and stock index components early Wednesday morning. These included JPMorgan Chase (JPM) — the largest U.S. bank by assets — along with Delta Air Lines (DAL) and Bed, Bath & Beyond (BBBY).

JPMorgan Chase CEO Jamie Dimon offered a cautiously upbeat view of the U.S. economy in the bank’s earnings release on Wednesday. Dimon noted that he remained “optimistic on the economy, at least for the short term,” but still sees “significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine.” And the bank also built up its credit reserves by a net $902 million, “largely due to higher probabilities of downside risk,” Dimon said.

Meanwhile, Delta Air Lines, one of the major airlines at the center of the reopening trade, suggested business would pick up further in the current quarter even as first-quarter results showed another loss, as the airline grappled with the omicron variant wave earlier this year. The carrier returned to profitability in the month of March, Delta noted, and noted that revenue is expected to reach between 92{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 97{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of pre-pandemic levels during the current quarter ended in June.

This early set of earnings reports helped set the tone for what is expected to ultimately be a much milder quarter for earnings growth than in recent periods. As companies grapple with rising labor, raw material and transportation costs and lap last year’s initial reopening-fueled jump in activity, many on Wall Street are looking for narrower margins than in recent quarters, even as sales hold up strongly amid elevated consumer demand and rising prices. Across the S&P 500, companies in aggregate are expected to report year-over-year earnings growth of just 4.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, which if realized, would mark the slowest rate since the fourth quarter of 2020, according to FactSet.

“This earnings season becomes one of the most important earnings seasons because it’s going to give you a lot of insight into which companies … have that durable demand, which companies have that pricing power,” Kristen Bitterly, Citi head of global wealth investments, told Yahoo Finance Live on Tuesday.

“Even in decades like the 1970s, when we had extreme inflation, large-cap quality U.S. equity shares were able to double their share price over that period,” she added. “So that’s the pocket of the market where we’re confidently either staying invested or getting invested.”

And indeed, inflation has remained a primary concern for investors, threatening to weigh further on both consumers’ wallets and corporate profits. The Bureau of Labor Statistics’ March Consumer Price Index (CPI) showed inflation rose at the fastest rate since late 1981 last month, jumping by a slightly faster-than-expected 8.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over last year.

However, some economists suggested the report was not all bad news, and showed some tentative signs of a peak in the rate of price increases.

“The CPI report I think actually has a little bit more good news in it than it appears right on the surface … there’re a number of things in here that suggests that we’re starting to see inflation peak, and it will roll over in the next few months,” Tom Simmons, Jefferies fixed income money market economist, told Yahoo Finance Live on Tuesday. “[It’s] important to keep in mind that CPI, for March, the reference period here was right after the Russian invasion of Ukraine. So really, it’s capturing the most acute period of gasoline price increases. And we’ve seen them already starting to soften in the market a little bit in the few weeks since.”

“The other thing is that services ex-energy — and if you strip out the airline component — that was actually a little bit softer as well than the last few months,” he added. “Housing actually came in a little bit softer in the last few months as well, and goods ex-energy also are coming in a little bit softer as well. So you know, the consumer has been pretty well able to weather the storm here with inflation.”

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4:05 p.m. ET: Stocks close higher, Nasdaq gains 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Here’s where stocks closed out Wednesday’s session:

  • S&P 500 (^GSPC): +49.14 (+1.12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,46.59

  • Dow (^DJI): +344.23 (+1.01{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,564.59

  • Nasdaq (^IXIC): +272.02 (+2.03{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,643.59

  • Crude (CL=F): +$3.62 (+3.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $104.22 a barrel

  • Gold (GC=F): +$5.10 (+0.26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,981.20 per ounce

  • 10-year Treasury (^TNX): -3 bps to yield 2.697{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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1:03 p.m. ET: Bed Bath & Beyond shares turn positive despite surprise quarterly loss

Shares of Bed Bath & Beyond (BBBY) gained intraday on Wednesday, shaking off early losses of as much as 12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after the retailer posted an unexpected loss for its fiscal fourth quarter and missed sales expectations.

Adjusted losses were 92 cents a share, whereas Wall Street analysts were looking for earnings of 13 cents a share during the holiday shopping season. Comparable sales were also down 12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or more than the 8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drop anticipated, based on Bloomberg consensus data.

“We are disappointed that our sales and gross margin performance does not reflect our team’s hard work and execution against both strategic and transformation efforts in 2021,” the company’s CEO Mark Tritton said in the quarterly report’s press release.

“Macroeconomic factors, such as the disruption of the global supply chain, the Omicron variant, as well as the geopolitical turbulence weighing on consumer confidence, have uncovered more vulnerabilities than we could have foreseen at this stage of our transformation, as we completely rebuild the foundation of our business,” he added.

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11:21 a.m. ET: Peloton shares gain after activist investor Blackwells Capital calls for sale

Peloton (PTON) shares rose Wednesday after activist investment firm Blackwells Capital issued a new call for the connected fitness company to be sold.

“Peloton is a strategically valuable asset that is attractive to many potential acquirers,” according to Blackwells Capital’s slide deck. “An insightful and capable operator would be willing to pay a premium beyond conventional cost and revenue synergies for the opportunity to ‘Reimagine Peloton’ as a dramatically different business than it is today.”

Jason Aintabi, chief investment officer of Blackwells, also doubled down on his criticism of Peloton’s former CEO John Foley, who remains on the board as executive chairman.

“Peloton will continue to be poorly valued for as long as a close-knit group of insiders, who have proven themselves incapable of creating value, continue to wield voting power far in excess of their economic interest,” Aintabi said in a statement. “No shareholder should want Mr. Foley to still sit atop the management pyramid or control the Board through his super voting-stock. He lost his entitlement to both positions when he destroyed $40 billion of shareholder wealth in less than a year.”

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9:31 a.m. ET: Stocks look for direction

Here were the main moves in markets as of 9:31 a.m. ET:

  • S&P 500 (^GSPC): -4.23 (-0.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,393.22

  • Dow (^DJI): -32.30 (-0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,188.06

  • Nasdaq (^IXIC): -9.23 (-0.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,362.34

  • Crude (CL=F): +$1.44 (+1.43{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $102.04 a barrel

  • Gold (GC=F): +$5.20 (+0.26{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,981.30 per ounce

  • 10-year Treasury (^TNX): -2.6 bps to yield 2.6990{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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8:50 a.m. ET: Producer prices hit new high

U.S. producer prices for final demand rose 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in March after rising 0.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in February, the Labor Department said on Wednesday. For the full year, PPI jumped 11.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} — the biggest gain since the 12-month data was calculated in November 2010. The results superseded estimates of 10.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, according to Bloomberg consensus.

The latest print suggests inflation will remain elevated as Russia’s war on the Ukraine rages on and pushes prices of oil and other commodities higher.

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7:20 a.m. ET: Stock futures rise amid earnings

Here’s where stocks were trading Wednesday morning:

  • S&P 500 futures (ES=F): +26.5 points (+0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,419.50

  • Dow futures (YM=F): +172 points (+0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,311.00

  • Nasdaq futures (NQ=F): +110.75 points (+0.79{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,055.75

  • Crude (CL=F): +$1.45 (+1.44{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $102.05 a barrel

  • Gold (GC=F): +$4.20 (+0.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,980.30 per ounce

  • 10-year Treasury (^TNX): +0.6 bps to yield 2.733{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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7:03 a.m. ET: JPMorgan posts mixed Q1 results as investment banking revenue slides over last year

JPMorgan Chase posted a mixed first-quarter results, with overall adjusted revenue topping Wall Street’s estimates while some major businesses within the bank showed some softening.

Adjusted revenue of $31.6 billion dropped 4.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over last year but exceeded consensus estimates for $31.4 billion, according to Bloomberg data. Both fixed income and equity sales and trading revenue topped expectations while declining compared to last year, with these coming out to about $5.7 billion and $3.1 billion, respectively. Investment banking revenue, however, sank by a more marked 28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and missed estimates, totaling $2.06 billion as equity and debt underwriting activity decreased at the start of this year compared to last.

CEO Jamie Dimon also noted that the banks core lending business remained solid during the quarter.

“Lending strength continued with average firmwide loans up 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} while credit losses are still at historically low levels,” Dimon said in the earnings release.

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6:50 a.m. ET: Delta shares rise after airline posts narrower-than-expected Q1 loss, returns to profitability in March

Delta Air Lines shares moved higher in the pre-market session after the airline posted estimates-topping first-quarter results, which included a smaller-than-expected loss.

Adjusted losses came out to $1.23 per share for the March quarter, or narrower than the $1.26 per share loss consensus analysts expected, according to Bloomberg data. Adjusted revenue was $8.2 billion, and was 79{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} recovered compared to levels from the comparable quarter in 2019 before the pandemic. Capacity was 83{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} restored relative to the pre-pandemic period, Delta added.

For the current quarter ending in June, Delta said it expects capacity to further rebound to 84{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of June quarter 2019 levels, with total revenue between 93{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 97{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of levels from that period in 2019.

“With a strong rebound in demand as omicron faded, we returned to profitability in the month of March, producing a solid adjusted operating margin of almost 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996},” Delta CEO Ed Bastian said in the company’s earnings release Wednesday morning. “As our brand preference and demand momentum grow, we are successfully recapturing higher fuel prices, driving our outlook for a 12 to 14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} adjusted operating margin and strong free cash flow in the June quarter.”

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6:10 p.m. ET Tuesday: Stock futures head for a lower open

Here’s where markets were trading Tuesday evening before the opening bell:

  • S&P 500 futures (ES=F): +4.25 points (+0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,397.25

  • Dow futures (YM=F): +33 points (+0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,172.00

  • Nasdaq futures (NQ=F): +17.75 points (+0.13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,962.75

NEW YORK, NEW YORK - APRIL 12: Traders work on the floor of the New York Stock Exchange during afternoon trading on April 12, 2022 in New York City. Data released this morning showed that inflation rose 8.5 percent in March, the highest annual increase since December 1981, amid energy prices soaring due to Russia's war in Ukraine. (Photo by Michael M. Santiago/Getty Images)

NEW YORK, NEW YORK – APRIL 12: Traders work on the floor of the New York Stock Exchange during afternoon trading on April 12, 2022 in New York City. Data released this morning showed that inflation rose 8.5 percent in March, the highest annual increase since December 1981, amid energy prices soaring due to Russia’s war in Ukraine. (Photo by Michael M. Santiago/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

Read the latest financial and business news from Yahoo Finance

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Stocks dip as investors digest hawkish Fed remarks, eye more sanctions

Stocks dip as investors digest hawkish Fed remarks, eye more sanctions

U.S. stocks fell Wednesday as investors eyed more Western sanctions against Russia and digested hawkish remarks from key monetary policymakers. These suggested that more members of the Federal Reserve were open to moving aggressively to raise interest rates and bring down demand and persistently elevated levels of inflation.

The S&P 500 dropped, adding to losses after the blue-chip index ended Tuesday’s session lower by 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The Dow Jones Industrial Average and Nasdaq also extended declines. In the bond market, the benchmark 10-year Treasury yield rose to top 2.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, marking its highest level since May 2019.

Developments on Russia’s war in Ukraine and the Western response remained in focus Wednesday as the U.S., European Union and Group of Seven readied another round of sanctions on the Kremlin. The U.S. is expected to add penalties to more Russian government officials and family members, and Russian-owned enterprises and financial institutions.

Meanwhile, hawkish commentary from Federal Reserve officials also knocked U.S. equities from their latest march higher and send Treasury yields spiking.

Namely, Federal Reserve Governor Lael Brainard said Tuesday that the Federal Open Market Committee (FOMC) was “prepared to take stronger action” should already elevated indicators of inflation rates and expectations warrant such moves.

Speaking in a webcast, Brainard suggested this could include aggressive interest rate hikes and a much quicker drawdown of the Federal Reserve’s balance sheet — which has thus far ballooned to nearly $9 trillion — than in previous periods.

“Given that the recovery has been considerably stronger and faster than in the previous cycle, I expect the balance sheet to shrink considerably more rapidly than in the previous recovery, with significantly larger caps and a much shorter period to phase in the maximum caps compared with 2017–19,” Brainard said. She noted the process of reducing the Fed’s balance sheet holdings, or beginning quantitative tightening, could begin as soon as the Fed’s next meeting in May.

Other Fed members also suggested they were on board with more policy tightening in the near-term. San Francisco Fed President Mary Daly told the Financial Times on Tuesday that the case for a 50 basis-point interest rate hike — or a hike double the size of the central bank’s typical per-meeting increase — “has grown.”

“The fact is, the Fed has made it very clear … it’s paramount that they go after inflation and do whatever it takes to staunch the rise in inflation,” Quincy Krosby, chief equity strategist for LPL Financial, told Yahoo Finance Live. “They’re going to do it, and I think the market is getting the sense that this is going to be a choppy path.”

“The Fed may go until it breaks something … but it’s clear that this is their mission, and they are going to go ahead with it, full steam – more than 2017, more than 2018,” she added, referring to the last time the Federal Reserve underwent quantitative tightening several years ago.

With inflation rates in the U.S. still holding at around 40-year highs and forcing the Fed’s hand in aggressively tightening financial conditions, some on Wall Street have downgraded their expectations for U.S. and global growth. Deutsche Bank economists said Tuesday they expected the U.S. to tip into a recession at the end of next year as the Fed rapidly hikes rates to address high prices.

“We now expect the U.S. economy to be in outright recession by late next year, and the [Euro area] in a growth recession in 2024 with unemployment edging up,” Deutsche Bank economists David Folkerts-Landau and Peter Hooper said. “Our baseline view is that these developments will spill over to damp growth in much of the rest of the world and at the same time help to bring inflation back toward mandated levels, diminishing the risk of greater disruptions further down the road.”

Still, the economists noted their call for a recession next year “is currently way out of consensus” — and indeed, many on Wall Street still see a slowdown, but not necessarily a period of negative growth in the near-term domestically.

“We’re not thinking that the Fed is going to push the economy into recession,” Veronica Willis, Wells Fargo Investment Institute investment strategy analyst, told Yahoo Finance Live on Tuesday. “I think most are not expecting that. But we are expecting kind of a slowdown in economic growth from what we had expected previously, but still around average economic growth here in the U.S.”

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9:45 a.m. ET: Bitcoin prices dip below $45,000, pulling down crypto-linked stocks

Bitcoin (BTC-USD) prices fell below $45,000 for the first time since last week on Wednesday, bringing shares of cryptocurrency-linked stocks including Coinbase (COIN), Bakkt Holdings (BKKT) and Riot Blockchain (RIOT) lower as well.

Bitcoin prices have been on a roller-coaster ride this year, tracking the volatility across other risk assets as geopolitical and monetary policy concerns increased. Prices began the year around $48,000 for the largest cryptocurrency by market cap, but dipped as low as below $35,000 so far this year.

Other major cryptocurrencies including Ethereum (ETH-USD), XRP (XRP-USD) and Solana (SOL-USD) also dipped Wednesday morning.

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9:39 a.m. ET: JetBlue shares drop after airline makes competing bid for Spirit

JetBlue (JBLU) shares dropped Wednesday morning after the carrier made an offer to purchase Spirit Airlines (SAVE) — less than two months after the budget airline agreed to merge with Frontier Group (ULCC).

JetBlue stepped in with $3.6 billion offer to buy Spirit Airlines, with the all-cash deal coming out to $33 per outstanding Spirit share. The combined company would have a fleet of 450 aircraft with another 312 Airbus aircraft to be delivered over the next six years, and would bring more flights to hubs including New York and Florida, where both airlines already operate.

However, in February, Frontier Group made its own bid to buy Spirit for $2.9 billion, in a deal the companies said at the time would save customers about $1 billion per year. JetBlue said in its press release this morning that its offer was a “superior proposal” and that it would be “more effective than Ultra-Low-Cost Carriers in Introducing Competition and Bringing Down Legacy Carrier Fares.”

Wall Street, however, has expressed skepticism over a JetBlue-Spirit tie-up.

“The merits of a potential JetBlue-Spirit merger are not as abundantly clear to us as are those that could stem from other combinations among remaining, non-Big 3 airlines,” JPMorgan airline analyst Jamie Baker wrote in a note this morning.

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9:31 a.m. ET: Stocks open lower, Treasury yields surge

Here’s where markets were trading Wednesday morning:

  • S&P 500 (^GSPC): -36.19 (-0.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,488.93

  • Dow (^DJI): -229.02 (-0.66{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,412.16

  • Nasdaq (^IXIC): -178.10 (-1.27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,023.64

  • Crude (CL=F): +$0.51 (+0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $102.57 a barrel

  • Gold (GC=F): +$2.20 (+0.11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,929.70 per ounce

  • 10-year Treasury (^TNX): +7.7 bps to yield 2.631{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

8:00 a.m. ET: Mortgage applications fall for fourth straight week as rates rise further

U.S. mortgage applications dropped for a fourth consecutive week into the beginning of April, with fast-rising mortgage rates deterring homeowners from refinancing and new buyers from coming into the market.

The Mortgage Bankers Associations’ weekly index showed mortgage applications fell 6.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} week-on-week during the period ending April 1. This came following a 6.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drop during the prior week.

Refinances fell 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from the previous week and by 62{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from the same week last year, bringing overall applications for refinances down to the lowest level since spring 2019. Purchases fell 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} week-over-week on a seasonally unadjusted basis, and declined 9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from the comparable period last year.

“Mortgage application volume continues to decline due to rapidly rising mortgage rates, as financial markets expect significantly tighter monetary policy in the coming months. The 30-year fixed mortgage rate increased for the fourth consecutive week to 4.90{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and is now more than 1.5 percentage points higher than a year ago,” Joel Kan, MBA associate vice president of economic and industry forecasting, said in a press statement Wednesday.”

“The hot job market and rapid wage growth continue to support housing demand, despite the surge in rates and swift home-price appreciation,” Kan added. “However, insufficient for-sale inventory is restraining purchase activity.”

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7:16 a.m. ET: Stock futures fall

Here’s where markets were trading Wednesday morning:

  • S&P 500 futures (ES=F): -38 points (-0.84{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,482.25

  • Dow futures (YM=F): -214 points (-0.62{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,336.00

  • Nasdaq futures (NQ=F): -203 points (-1.37{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,625.00

  • Crude (CL=F): +$1.42 (+1.39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $103.38 a barrel

  • Gold (GC=F): +$4.70 (-0.24{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,922.80 per ounce

  • 10-year Treasury (^TNX): +8.3 bps to yield 2.637{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:10 p.m. ET Tuesday: Stock futures edge higher

Here’s where markets were trading Tuesday evening as the overnight session began:

  • S&P 500 futures (ES=F): +5.25 points (+0.12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,525.50

  • Dow futures (YM=F): +34 points (+0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,584.00

  • Nasdaq futures (NQ=F): +25.75 points (+0.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,853.75

NEW YORK, NEW YORK - MARCH 30: Traders work on the floor of the New York Stock Exchange on March 30, 2022 in New York City. U.S. stocks opened low after rallying to start the week. (Photo by Michael M. Santiago/Getty Images)

NEW YORK, NEW YORK – MARCH 30: Traders work on the floor of the New York Stock Exchange on March 30, 2022 in New York City. U.S. stocks opened low after rallying to start the week. (Photo by Michael M. Santiago/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

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Donald Morrison: Looking the future straight in the eye | Columnists

This is the week when journalistic pundits, economic analysts and movie star lecturers check out to make feeling of the past 12 months, prognosticate about the yr forward and, if they’ve had way too substantially espresso, draw classes for posterity. I’m not heading to do that.

Never was considerably fantastic at it anyway. I identified as the 2016 election for Hillary Clinton, and I predicted 5 out of the previous three economic recessions — as two as well lots of compared to reality. I am, nevertheless, a serial parent and grandparent, and therefore eminently experienced in the ancient and arcane art of reading through the expressions on a newborn baby’s experience.

I experienced that option a short while ago when I gazed for the to start with time at my most recent grandson, the excellent vacation present. He was hardly a 7 days previous, but in his eyes I could see hidden depths of intelligence and tolerance. (I would be expecting nothing at all considerably less.) Also, unmistakable traces of … fret.

About what? I wondered. His up coming food, his present diaper, his at any time-gurgling tummy? Or maybe, I assumed, he’s worried about the environment we’ll be leaving him. He was providing me a seem that reported, “Love you, Grandpa, but you guys positive messed up.”

He has a place. Our generation is bequeathing him, and his entire age team, a earth threatened by climate problems that we helped produce, knowingly worsened and proceed to neglect. We’re handing him a planet beset by war, terrorism, racism, inequality, out-of-regulate know-how. We’re leaving him a nation that, if some present tendencies continue, might no more time be a democracy by the time he’s of voting age.

It did not have to be that way. We’ve acknowledged for many years that our dependancy to fossil fuels was jeopardizing the prosperity and extremely survival of potential generations. Also, that our overly financialized financial system was a con video game, our health and fitness care technique a shambles, our political program distinguished by pandering and paralysis. We did around zilch to deal with these issues.

And so, the generation of Jack — that’s his name — will pay out the price for our folly and fecklessness. He and his cohorts will have each and every appropriate to curse our memory.

Decades in the past, when my brand-new eyes initial satisfied my father’s, I likely discerned a bit far more self-confidence. He experienced just returned from aiding defeat fascism. The U.S. economy was booming, and America was the envy of the entire world. Beaming with optimism, my father was preparing to acquire the business the place he’d worked just before the war.

I will have to have gazed up at him and considered, “I can rest. He’s bought this.” And he did, for decades.

My son is beaming these days, however exhausted and targeted on my new grandson’s immediate needs. That frees me to believe long term, a enjoyment for people my age. Besides that the ensuing conclusions are deeply unpleasant.

We quite a great deal knew how to address the different difficulties our offspring will inherit. We’ve been chatting for many years about tighter emissions rules, carbon taxes, stronger anti-belief enforcement, much better privateness protections, far more productive marketing campaign finance limitations, more strong voting protections, common well being protection, sponsored little one treatment, compensated depart, saner regulations on gun violence, immigration, homelessness and drug abuse, together with a hundred other ways that would have produced my grandson’s planet a vastly far better location.

But, we just couldn’t get it carried out, and we won’t be all-around to complete the career. We blew it. Time to move the torch.

It is awesome how many facial expressions a new child has. Aside from stress, I have noticed enthusiasm, boredom, concern, fascination, disdain and joy scud throughout my grandson’s visage, like clouds on a windy afternoon.

Publications and web sites for new mothers and fathers provide article content trying to decode every single youthful smile and grimace. Significant scientists caution in opposition to reading way too substantially into these, noting that toddlers have to have far more than a couple of weeks to create the cognitive expertise and facial muscle tissues to kind purposeful expressions.

They hardly ever met my grandson. Nestled in the crook of my arm the other working day, he took a deep breath, squared his shoulders, thrust out his Morrisonesque jaw and gave me an arrestingly stage, reassuring gaze. It was as if he could read my regrets and insecurities. And answer, with the innate wisdom and boundless self-assurance of the very young: “Relax, Grandpa. I’ve got this.”

Donald Morrison is an Eagle columnist and co-chairman of the advisory board. The opinions expressed by columnists do not essentially mirror the sights of The Berkshire Eagle.

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Litigation Finance Companies Eye Law Firm Ownership in Arizona

Two major litigation finance companies say Arizona’s loosening of legal industry regulations opens the door for them to co-own law firms.

Burford Capital Ltd. and Longford Capital Management LP executives said that with Arizona no longer requiring lawyers to own firms—and other states considering similar steps—law partners will increasingly consider the benefits of non-attorney ownership stakes.

“Equity investors will start to take notice,” said William Farrell Jr., Longford’s co-founder and managing director, in an interview. “The first of those groups will likely be large-scale litigation funders like Longford Capital because we have the greatest relationships and insights into what makes law firms successful.”

Litigation finance ownership would be a radical shift in how firms are structured and run. Currently, the financiers pay for individual lawsuits—or tranches of them—with a profit goal if their parties win. But ownership would give the funders more say in how firms spend money and which cases they take.

Arizona’s model would let Burford work across all of parts of a law operation, said Emily Slater, Burford’s managing director. Burford would “be a broader investor in the firm’s profitability over time,” she said, and it could “take that risk with the firm as it continues to grow or contract.”

Mid-size firms and litigation boutiques may be willing to take up litigation funders on ownership offers, said Marcie Borgal Shunk, president of Houston-based The Tilt Institute, a law firm consultancy.

“I see opportunities for collaboration, especially at the behest of clients or in pursuit of market disruption,” Shunk said. “There are plenty of break-off firms and forward-thinkers looking to find a new, better way to deliver legal services. There is no reason why litigation funders cannot be part of that equation.”

Arizona Experiment

The Arizona experiment took root when the state’s supreme court last year eliminated its version of ethics Rule 5.4. That rule barred non-lawyers from having an economic interest in law firms or other legal service operations.

The supreme court’s goal with the move was to try to increase low- and middle-income Arizonans’ access to legal services.

The state so far has approved 12 legal companies to take part in its alternative business structure program since the regulatory changes took effect Jan. 1. The companies include LZ Legal Services, an Arizona-focused subsidiary of the online consumer and business law giant LegalZoom.

Graphic: Jonathan Hurtarte/Bloomberg Law

Other businesses have applied, including Rocket Lawyer, which is already part of legal services experiment in Utah. Other states considering legal regulatory changes include California, New York, Illinois, Michigan and North Carolina.

Longford’s Farrell said his company most likely will refrain from acting on law firm co-ownership until other states beyond Arizona loosen their rules.

He said he hasn’t spoken with any of the 12 companies that are part of Arizona’s program, though he discussed related topics over the last year with attorneys from several law firms. Farrell declined to name them.

‘Split Loyalties’

The AmLaw 200 firm Lewis Roca Rothgerber Christie, which has two offices in Arizona, has received about a dozen calls and emails from mostly smaller private equity groups eager to discuss possible investments, said Ken Van Winkle, the firm’s managing partner.

They all got the same answer—no. “It doesn’t work for us,” Van Winkle said.

Lewis Roca would need to create a separate entity in Arizona because its offices in Colorado, Nevada, California, and New Mexico are in states that prohibit non-lawyer ownership of firms, Van Winkle said.

He also said he’s worried about the drive for profits a litigation funder or private equity investor would bring to a law firm partnership.

“Our job, our loyalty, our commitment is to our clients and not to an investor,” Van Winkle said. “I would worry about the possibility of split loyalties.”

Such ownership could also compromise lawyer independence, said Stephen Younger, a Foley Hoag partner and past president of the New York Bar Association.

“If they were there,” he said of litigation funders, “around the table at a partners meeting, that’s a much different dynamic.”

VIDEO: Bloomberg Law’s Roy Strom gives a peek inside the growing practice of litigation finance and explains what it means for the future of the business of law.

Profit Motive

Longford and other litigation funders argue their co-ownership roles would spur firms to make sustained investments in innovations like legal technology that would aid them over the long haul.

Farrell said partnerships would benefit clients through reduced legal fees and by luring top-level C Suite executives, including non-lawyers, to manage the new companies.

Clients shouldn’t worry that profit motives might trump lawyer independence under new ownership models, said Burford Director Andrew Cohen in a written statement.

Arizona ethics Rule 2.1, for example, already requires that lawyers “exercise independent professional judgment” regardless of external factors such as financing, he said.

“So where non-lawyer ownership is allowed, when a lawyer is advising a client, their ethical obligation is first and foremost to that client—as in every other type of funding situation,” Cohen said.

Industry Growth

Litigation finance became a $39 billion industry worldwide in 2019, according to the AmLaw 200 firm Brown Rudnick. While funders typically only get paid if the suits result in monetary awards, the returns can be as high as two-to-three times their investment.

Burford said earlier this year it will receive $103 million as a result of funding litigation by Tatiana Akhmedova, the ex-wife of billionaire Farkhad Akhmedov, in the largest financial dispute Britain’s divorce courts have ever seen, Bloomberg News reported. Akhmedov agree to pay 135 million pounds ($186 million).

Burford’s investment in a lawsuit seeking damages from Argentina’s 2012 nationalization of state-run oil producer YPF SA, known as the “Peterson” case, had brought in $236 million for the company as of March.

But deals don’t always end happily. Pravati Capital, which works with individual attorneys and small firms, has been forced to arbitrate with at least 14 of its clients in part over claims that the deals they struck with law firms ensured that the company gets paid back even if the case being funded loses, according to a Bloomberg Law account.

Scottsdale, Ariz.-based Pravati declined to respond to questions about whether the company is considering Arizona ventures because of the state law firm ownership rule change.

Another litigation financer, Omni Bridgeway, also declined comment.

Overseas Owners

There is precedent for litigation funders becoming co-owners of law firms—overseas. In mid-2020, Burford gained equity when it assumed a minority ownership stake in the boutique U.K. law firm, PCB Litigation.

But in the U.S., other jurisdictions with larger legal markets need to join Arizona in scrapping Rule 5.4—or at least approve experimental programs like Utah has, litigation finance executives said.

This could happen within two-to-three years, said Farrell, given that California and other large states also have begun to weigh the benefits of rule changes.

“It might become a popular trend,” Farrell said. “We want to be ready to seize opportunities.”

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Stock futures rise as investors eye bank earnings, await inflation data

Stock futures gained on Wednesday as investors digested new earnings data and awaited a key inflation report, which will help show the extent to which rising prices have weighed on the economic recovery and corporate profits. 

Third-quarter earnings season picked up, with notable companies including JPMorgan Chase (JPM) and BlackRock (BLK) posting results before market open. JPMorgan Chase, the largest U.S. bank by assets, posted results that topped estimates on both the top and bottom lines, boosted by a larger-than-expected release of credit reserves and strong sales in the firm’s investment banking and equities trading divisions.

Investors have been trimming their outlooks for overall S&P 500 earnings growth for the third quarter, given that rising input prices, higher labor costs and other supply-side headwinds likely weighed on margins and chipped away at profitability. 

Recent developments for a plethora of companies across industries have already reflected the impacts of supply chain shortages and shipping challenges. The Wall Street Journal reported that firms from Costco (COST) to Walmart (WMT) have resorted to chartering their own ships to import goods ahead of the holiday season. And Bloomberg reported Tuesday that Apple (AAPL) was set to cut its iPhone production targets for this year by as many as 10 million units due to ongoing chip shortages. 

The latest batch of economic data due Wednesday is likely to confirm that these supply and demand mismatches translated to ongoing inflationary pressures at the start of the fall. In the Labor Department’s Consumer Price Index due out Wednesday morning, consensus economists expect to see core prices, excluding food and energy, rise by 4.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in September over last year, coming down only slightly from June’s 30-year high of 4.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. 

Wall Street analysts are looking for third-quarter earnings growth of about 27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on a year-over-year basis, according to FactSet data. Though this would still be the third-fastest earnings growth rate since 2010, it would be a marked slowdown from the second quarter’s nearly 90{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} pace. 

Savita Subramanian, Bank of America’s head of U.S. equity and quantitative strategy, wrote in a note this week that this “will be a make-or-break quarter with all eyes on margins and supply chains. 

Other strategists agreed. 

“We think investors should fasten their seatbelts because this is going to be one rocky earnings season,” Wall Street Alliance Group’s Aadil Zaman told Yahoo Finance Live on Tuesday. “Supply chain issues are going to be dominating the earnings, and some companies, we are going to see, are going to give us an early Halloween shock.”

However, given that issues around materials shortages, port congestion and labor scarcities have already been well-known among investors, traders should focus more closely on company commentary and outlooks as a signal of future resilience, some pundits noted.  

“The message that I’m giving to our investors is focus not necessarily on what the third-quarter print is, but more importantly focus on what companies are saying about visibility going forward,” John Lynch, chief investment officer for Comerica Wealth Management, told Yahoo Finance Live. “And we think that we’re going to see good visibility from some of the value and cyclical players going forward.”

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7:30 a.m. ET: Stock futures point to a higher open

Here’s where markets were trading Wednesday morning: 

  • S&P 500 futures (ES=F): +7 points (+0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,347.75

  • Dow futures (YM=F): +42 points (+0.12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 34,302.00

  • Nasdaq futures (NQ=F): +52.75 points (+0.36{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,706.66

  • Crude (CL=F): -$0.36 (-0.45{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $80.28 a barrel

  • Gold (GC=F): +$12.90 (+0.73{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,772.20 per ounce

  • 10-year Treasury (^TNX): -1 bp to yield 1.57{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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7:18 a.m. ET Wednesday: JPMorgan Chase beats 3Q results top expectations, kicking off bank earnings on a high note

JPMorgan Chase handily exceeded Wall Street’s expectations for third-quarter earnings and revenues, with the results boosted a leap in investment banking activity. 

Investment banking revenue surged 45{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over last year to $3 billion, with both advisory and equity underwriting fees increasing. Elsewhere in the firm, equity sales and trading revenue grew 30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to reach a better-than-expected $2.60 billion. This growth helped offset a 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drop in fixed-income sales and trading revenue, though this still came about in-line with estimates at $3.7 billion.

JPMorgan’s quarterly earnings also received a positive impact from the release of $2.1 billion in net credit reserves, which had been set aside earlier on during the pandemic to protect against potential loan defaults and nonpayments. 

In a statement, JPMorgan Chase CEO Jamie Dimon said the reserve release came “as the economic outlook continues to improve and our scenarios have improved accordingly. As we have said before, however, we do not consider these scenario-driven releases core or recurring profits.” 

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6:10 p.m. ET Tuesday: Stock futures edge lower

Here’s where markets were trading Tuesday evening:

  • S&P 500 futures (ES=F): -11 points (-0.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,329.75

  • Dow futures (YM=F): -51 points (-0.15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 34,209.00

  • Nasdaq futures (NQ=F): -54.5 points (-0.37{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,595.75

NEW YORK, NEW YORK - SEPTEMBER 30: Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City. In afternoon trading the Dow was down over 250 points as investors continue to worry about inflation, wages and supply chain issues. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – SEPTEMBER 30: Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City. In afternoon trading the Dow was down over 250 points as investors continue to worry about inflation, wages and supply chain issues. (Photo by Spencer Platt/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter