U.S. stocks were mostly lower Friday as investors assessed more corporate earnings and hawkish comments from Federal Reserve Chair Jerome Powell that hinted a half-point rate hike was likely next month.
The S&P 500 dipped 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, on pace to round out a third straight week of losses, while the Dow Jones Industrial Average fell 170 points. The tech-heavy Nasdaq Composite climbed slightly, up 0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Meanwhile, Treasury yields continued their march forward, with the 10-year U.S. benchmark yielding 2.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, the highest level since December 2018.
Speaking at a panel hosted by the International Monetary Fund Thursday, Powell said a 50-basis point rate increase was “on the table” for May when the U.S. central bank holds its next policy-setting meeting. The Fed chair also reiterated that policymakers were committed to “front-end loading” inflation-fighting efforts.
“We really are committed to using our tools to get 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} inflation back,” Powell said in remarks before European Central Bank President Christine Lagarde and other officials, referring to the Fed’s target for annual price increases.
“We’re definitely in the cards for a 50 basis point rate hike in the May meeting,” Capital2Market President Keith Bliss said on Yahoo Finance Live on Thursday (video above). “The market is pretty good at dictating, if not indicating, where this is going to go.”
With the headline Consumer Price Index at its highest level in four decades, the U.S. Federal Reserve has recently signaled aggressive monetary tightening is underway to rein in rising price levels despite warnings from experts that moving too quickly could result in an economic contraction.
“The big question is whether the earnings can really sustain this kind of a macro backdrop of slower growth and Fed policy,” Deutsche Bank Wealth Management Chief Investment Officer Deepak Puri said on Yahoo Finance Live earlier this week. “It seems certain companies can — historically that’s been the case. What’s different this time is really the trifecta, which is higher costs of capital, quantitative tightening, plus a lack of … a big fiscal stimulus.”
Despite worries from Wall Street over the next policy moves and the risks posed to traders, a readout of the Federal Reserve’s recently published Beige Book suggests Main Street sentiment remains positive overall.
Strategists at LPL Research said the Beige Book Barometer may provide a more accurate picture of the economic outlook than current consumer sentiment, which has been weak in the face of soaring inflation. Despite an economic slowdown in the first quarter, data out of Washington has come in better than consensus expectations in recent weeks.
“Looking at the Fed’s most recent Beige Book, local U.S. businesses remain resilient despite elevated uncertainty,” LPL Financial Asset Allocation Strategist Barry Gilbert said. “Inflation, COVID, and the conflict in Ukraine will keep uncertainty elevated in the near term, but if we can navigate these challenges we believe there are solid prospects of a pick-up in growth in the second half of the year.”
Elsewhere in markets, shares of American Express (AXP) fell 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} despite a beat on its quarterly earnings in results out Friday morning. Shares of Verizon (VZ), which also reported before the opening bell, tumbled 6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after the telecommunications giant said it lost 36,000 monthly phone subscribers during the first quarter.
Investors continued to watch Snap Inc. (SNAP) after the company projected a strong outlook for user growth on Thursday despite warning supply-chain disruptions and inflation could continue to hurt advertising demand. Shares of Snap were up about 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading.
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10:03 a.m. ET: U.S. business activity decelerates in April
Business activity across the U.S. eased in April, with inflationary pressures putting a dent in service sector output as rising prices weighed on spending.
S&P Global’s Flash Composite Purchasing Managers’ Index, which serves as a measure of overall economic health, fell to a reading of 55.1 this month from 57.7 in March. Economists surveyed by Bloomberg expected a reading of 57.9. Any reading above 50 indicates growth in the private sector.
“Many businesses continue to report a tailwind of pent up demand from the pandemic, but companies are also facing mounting challenges from rising inflation and the cost of living squeeze, as well as persistent supply chain delays and labor constraints,” S&P Global chief business economist Chris Williamson said in a statement.
“These headwinds, plus increased concerns over the economic outlook and tightening monetary policy, meant business confidence about the outlook slipped sharply lower in April. However, with the overall pace of economic growth and hiring remaining relatively solid, for now the focus from a policy perspective is likely to remain firmly on the need to rein in the record high inflationary pressures signaled by the survey.”
U.S. stocks traded mixed Wednesday as investors took in a host of quarterly earnings results and looked ahead to more data.
The S&P 500 and Dow gained to extend advances from the previous session. The tech-heavy Nasdaq Composite declined as Netflix (NFLX) shares slumped after the company posting an unexpected decline in quarterly subscriber numbers.
Netflix’s disappointing results and guidance came in the midst of an earnings season that has so far been mixed. Earlier Tuesday, Hasbro (HAS) shares gained after the company raised its margin guidance and announced new price increases to counter rising costs. Other closely watched companies missed on major metrics or guidance, however, with Lockheed Martin (LMT) posting a year-over-year revenue decline that sent shares lower following its Tuesday report, and Johnson & Johnson (JNJ) cutting its full-year profit forecast.
And last week, the big banks posted tepid quarterly results, with financials posting their weakest start to an earnings season since the first quarter of 2020, according to Bank of America data. Just over one-third of the 11 financial names that reported results in the past week topped analyst estimates on both sales and earnings per share, analysts at Bank of America said in a note.
Overall, investors this earnings season have been closely attuned to how companies have performed in the face of rampant inflationary pressures, as prices rise at their fastest rates in 40 years. While many companies have opted to raise their own prices to help offset increasingly expensive commodities, transportation and other inputs, questions remain over how long consumers will be willing to continue paying passed-on costs.
And against this backdrop, many strategists are warnings investors to continue bracing for further volatility.
“Volatility works both ways,” said Steve Sosnick, Interactive Brokers chief strategist, told Yahoo Finance Live. He added that Tuesday’s marked move to the upside was simply “socially acceptable volatility.”
“It’s volatility in the right direction,” he said. “But we’re going to have to get used to bigger moves in both directions. And not only single day moves, but sort of multi-day runs.”
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10:00 a.m. ET: Existing home sales dip in back-to-back month
Sales of previously owned homes fell for a second consecutive month in the U.S. in March, with signs of cooling housing market activity mounting as home prices remain elevated and interest rates creep higher.
U.S. existing home sales fell by 2.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in March to reach a seasonally adjusted annualized rate of 5.77 million, according to the National Association of Realtors. February existing home sales were also downwardly revised to 5.93 million, compared to the 6.02 million previously reported.
The median price for an existing home in the U.S. in March jumped 15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over last year to reach $375,300.
“Home prices have consistently moved upward as supply remains tight,” Lawrence Yun, chief economist at the National Association of Realtors, said in a press statement. “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.”
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9:42 a.m. ET: Mortgage applications fall for sixth straight week as rates rise
Mortgage applications across the U.S. declined for a sixth consecutive week as rising interest rates deterred homeowners from refinancing and some new buyers from entering the market. Last week, the average 30-year fixed mortgage rate rose to reach 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
The Mortgage Bankers Association’s weekly index showed mortgage loan application volume fell 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} week-on-week during the period ended April 15. This came following a 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} decline during the previous week.
Refinances were down by 8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from the previous week and slid 68{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} versus the comparable week last year. Meanwhile, purchases were down 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a week earlier. On a seasonally unadjusted basis, purchases were also down by 14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over last year.
“The recent surge in mortgage rates has shut most borrowers out of rate/term refinances, causing the refinance index to fall for the sixth consecutive week,” Joel Kan, MBA associate vice president of economic and industry forecasting, said in a press statement Wednesday. “In a housing market facing affordability challenges and low inventory, higher rates are causing a pullback or delay in home purchase demand as well. Home purchase activity has been volatile in recent weeks and has yet to see the typical pick up for this time of the year.”
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9:30 a.m. ET: Stocks open higher
Here’s where markets were trading shortly after the opening bell Wednesday morning:
S&P 500 (^GSPC): +24.30 (+0.54{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,486.51
Dow (^DJI): +269.29 (+0.77{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 35,180.49
Nasdaq (^IXIC): +39.37 (+0.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,658.39
Crude (CL=F): +$0.68 (+0.66{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $103.24 a barrel
Gold (GC=F): -$10.70 (-0.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,948.30 per ounce
10-year Treasury (^TNX): -2.5 bps to yield 2.89{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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9:06 a.m. ET: Procter and Gamble shares rise after sales guidance tops estimates, as price hikes help offset rising costs
Shares of Procter & Gamble (PG) rose Wednesday morning after the consumer staples giant posted fiscal third-quarter results and full-year guidance that exceeded Wall Street’s estimates. The results appeared to affirm that Procter & Gamble’s last round of price hikes announced earlier this year were helping boost sales and counteract some of the impact of rising input costs.
For the third quarter, net sales came in at $19.38 billion, topping estimates for $18.73 billion, according to Bloomberg consensus data. This revenue beat was in turn led by fabric and home care segment sales of $6.7 billion, which includes brands like Tide and Downy. Company-wide organic revenue grew 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or well above the 6.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rise anticipated.
P&G also said it saw full-year organic revenue rising between 6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or better than the 5.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase anticipated. The company still sees its core earnings per share coming in at as much as $6.00 for the full fiscal year.
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7:06 a.m. ET: Stock futures head for mixed open
Here were the major moves in markets Wednesday morning:
S&P 500 (^GSPC): +3.75 (+0.08{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,463.00
Dow (^DJI): +63 (+0.18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,904.00
Nasdaq (^IXIC): -9.75 (-0.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,207.5
Crude (CL=F): +$0.73 (+0.71{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $103.29 a barrel
Gold (GC=F): -$3.90 (-0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,955.10 per ounce
10-year Treasury (^TNX): -5 bps to yield 2.865{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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6:12 p.m. ET: Stock futures open lower
Here’s where stocks were trading Tuesday evening:
S&P 500 futures (ES=F): -18.5 points (-0.41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,440.75
Dow futures (YM=F): -59 points (-0.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,782.00
Nasdaq futures (NQ=F): -124 points (-0.87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,093.25
NEW YORK, NEW YORK – APRIL 12: Traders work on the floor of the New York Stock Exchange during morning 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)
U.S. stocks fell Thursday to cap another losing week on Wall Street as investors digested a flurry of bank earnings and reeled from more red-hot CPI numbers.
The S&P 500 and tech-heavy Nasdaq Composite each settled at four-week lows, recording declines of 1.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively. The Dow Jones Industrial Average retreated from a slight advance earlier in the session to close 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower. Meanwhile, Treasury yields climbed higher, with the 10-year benchmark marking its biggest one-week jump to hit 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, the highest level since December 2018.
The majority of U.S. market indexes finished lower for the second straight week as war in Eastern Europe, inflationary pressures and anticipation for more combative measures by the Federal Reserve to tame rising price levels continued to weigh on sentiment.
“There’s a lot of fear and anticipation as we’re moving into this period of higher interest rates,” Portia Capital Management owner and president Michelle Connell told Yahoo Finance Live. “We’re just not quite sure how much the Fed’s going to dial those up. There’s a lot of uncertainty.”
Social media giant Twitter (TWTR) was again in focus on Thursday after Tesla CEO Elon Musk offered to buy the platform for $54.20 per share, or about $41 billion in cash. In a bid for the company outlined in a new SEC filing, Musk said Twitter must go private in order to make effective changes. Shares of Twitter were down 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $45.18 a piece at Thursday’s close.
Investors digested quarterly results from banking heavyweights Wells Fargo (WFC), Goldman Sachs (GS), Morgan Stanley (MS), and Citigroup (C) that reflected a lackluster start to 2022, with profits mostly down across the board after a boom year for the industry last year when it benefited from record dealmaking activity and a financial boost from releasing reserves set aside for potential pandemic loan losses.
The initial batch of reports preface a milder quarter for earnings growth than previous periods. However, earnings are expected to be a bright spot for investors who much of this year so far have grappled with sharp market swings tied to worsening geopolitical risk, inflationary pressures and fears monetary tightening may prompt an economic contraction as the Federal Reserve sets out on its rate hiking plans.
Analysts have tempered their expectations on first quarter earnings, lowering bottom-up EPS forecasts in aggregate for Q1 by 0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $52.21 to $51.83, according to data from FactSet. On the other hand, EPS forecasts for the second quarter are up by 1.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $55.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $56.07, by 2.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $57.82 to $59.23 for the third quarter, by 3.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $58.31 to $60.59 for the fourth quarter and by 2.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $223.43 to $227.80 for 2022 overall.
Economists at Bank of America in a note out this week also predicted a resilient earnings quarter despite grim macroeconomic headlines throughout the period.
“Leading signals and early reporters suggest a high likelihood of an EPS beat in Q1,” BofA said, adding the financial institution expects a 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} beat, or $53.50 vs. consensus $51.54. However, the bank warned analyst expectations for record margins in the coming quarters were “too high.”
“History suggests that oil shocks spawn weaker consumption with a three-to-four quarter lag, indicating a 2H slowdown,” the note said.
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4:00 p.m. ET: Stocks extended losses to cap another week in the red
Here’s how the major indexes closed out the holiday-shortened week:
S&P 500 (^GSPC): -53.98 (-1.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,392.61
Dow (^DJI): -113.75 (-0.33{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,450.84
Nasdaq (^IXIC): -292.51 (-2.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,351.08
Crude (CL=F): +$1.88 (+1.80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $106.13 a barrel
Gold (GC=F): -$9.40 (-0.47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,975.30 per ounce
10-year Treasury (^TNX): +14.1 bps to yield 2.8280{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
—
11:30 a.m. ET: Consumers are slightly more optimistic in early April
U.S. consumer sentiment unexpectedly bounced back in early April from a decade low, lifted by a positive outlook for wage growth amid a strong labor market and a decline in gasoline prices curbing some inflation worries.
The University of Michigan’s Consumer Sentiment Index climbed to 65.7 on a preliminary basis this month from a final reading of 59.4 in March, the lowest since 2011. Economists surveyed by Bloomberg expected a reading of 59.
The improved outlook was boosted by a 29.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} jump in the economic view for the year ahead and a 17.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase in personal financial expectations, according to survey Director Richard Curtin.
“A strong labor market bolstered wage expectations among consumers under age 45 to 5.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} – the largest expected gain in more than three decades, since April 1990,” he noted in a statement.
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10:25 a.m. ET: Mortgage rates hit 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to mark highest level in more than a decade
The rate on the 30-year fixed mortgage jumped to 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from 4.72{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} last week, according to Freddie Mac. A year ago at this time, the 30-year borrowing cost averaged 3.04{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
In the last five weeks alone, the rate has climbed 1.24 percentage points and is 1.89 points higher than at the end of 2021.
“This week, mortgage rates averaged five percent for the first time in over a decade,” said Sam Khater, Freddie Mac’s Chief Economist. “As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation.”
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9:30 a.m. ET: Stocks flat as investors digest bank earnings
Here were the main moves at markets at the start of Thursday’s trading session:
S&P 500 (^GSPC): +4.82 (+0.11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,451.41
Dow (^DJI): +141.03 (+0.41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,705.62
Nasdaq (^IXIC): -12.24 (-0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,631.35
Crude (CL=F): -$1.53 (-1.47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $102.72 a barrel
Gold (GC=F): -$4.20 (-0.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,980.50 per ounce
10-year Treasury (^TNX): +3.3 bps to yield 2.7200{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
American consumers continued spending in March even amid inflationary pressures that led to a surge in the costs of food, gasoline and other basics.
U.S. retail sales rose 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after logging a revised 0.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} jump from January to February. Wage gains, solid hiring and more money in banking accounts have fueled spending.
January’s increase of 4.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} was the biggest jump in spending since March 2021 when American households received a final federal stimulus check of $1,400.
The Commerce Department reported general merchandise stores saw business up 5.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while sales at clothing stores jumped 2.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Online sales rose 6.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and restaurant sales climbed 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
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8:45 a.m. ET: Another 185,000 Americans filed new claims last week
Applications for unemployment insurance rose slightly more than expected in the latest weekly data but held near a 54-year low set earlier this month.
The Labor Department’s latest weekly jobless claims report showed 185,000 claims were filed in the week ended April 9, coming in just above the 170,000 economists surveyed by Bloomberg had expected.
The prior week’s new claims fell to the lowest level since 1968 at 167,000. That compares to the average of about 218,000 new claims filed per week throughout 2019 before the pandemic.
Given the surge and then decline in jobless claims, the Labor Department has also now reconfigured the way it adjusts the weekly data to account for seasonal factors. Starting last week, the Labor Department returned to using “multiplicative” seasonal adjustment factors for the data. For much of the pandemic, the department had been using “additive” seasonal adjustments that help smooth out large swings in the weekly numbers.
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8:15 a.m. ET: Citi profit drops 46{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} due to loan loss provisions and slower dealmaking
Citigroup (C) logged a 46{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} plunge in first-quarter profit as it took a hit on provisions for Russia-related losses, a slump in underwriting fees and higher expenses.
The banking powerhouse added $1.9 billion to its reserves in the quarter to prepare for losses from direct exposures to Russia and the economic impact of its war in Ukraine. Citi is the most global of the U.S. banks. The move pushed credit costs to $755 million, a contrast from the $2.1 billion benefit one year ago when it freed up loss reserves built up during the COVID-19 pandemic.
Citi reduced its exposure to Russia to $7.8 billion, from $9.8 billion in December, also lowering its worst-case-scenario loss estimate to no more than $3 billion, down from the nearly $5 billion estimated last month.
Meanwhile, net income fell to $4.30 billion, or $2.02 per share from $7.94 billion, or $3.62 per share, a year earlier.
Shares of Citigroup were up 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading.
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8:03 a.m. ET: Goldman Sachs reports 42{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} fall in first-quarter profit
Goldman Sachs (GS) saw first-quarter profit halve during the first quarter on a slowdown in capital markets activity from levels in the same period last year that weighed on the bank’s investment banking business.
Profit applicable to common shareholders fell to $3.83 billion, or $10.76 per share, in the quarter ended March 31, from $6.71 billion, or $18.60 per share, a year ago.
Total net revenue fell to $12.93 billion in the quarter, down nearly 27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from last year.
“It was a turbulent quarter dominated by the devastating invasion of Ukraine,” CEO David Solomon said in a statement. “The rapidly evolving market environment had a significant effect on client activity as risk intermediation came to the fore and equity issuance came to a near standstill. Despite the environment, our results in the quarter show we continued to effectively support our clients.”
Goldman Sachs shares were up 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading.
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7:52 a.m. ET: Morgan Stanley first-quarter profit slumps 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on lower trading revenues
Morgan Stanley (MS) reported an 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drop in its first-quarter profit following a slump in equity underwriting revenue from last year’s highs. The company, however, saw a jump in advisory revenues driven by higher levels of completed M&A transactions.
The mega bank recorded net revenues of $14.8 billion for the first quarter ended March 31, compared to $15.7 billion a year ago. Net income was $3.7 billion, or $2.02 per share, down from $4.1 billion, or $2.19 per diluted share the same period a year ago.
“The Firm delivered a strong ROTCE of 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in the face of market volatility and economic uncertainty, demonstrating the resilience of our global diversified business,” Morgan Stanley CEO James Gorman said in a statement.
“Institutional Securities navigated volatility on behalf of clients extraordinarily well, Wealth Management’s margin proved resilient and the business added $142 billion net new assets in the quarter, and Investment Management benefited from its diversification,” he said said.
Shares of Morgan Stanley were up 2.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading.
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7:30 a.m. ET: Wells Fargo shares drop after bank reports 21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} quarterly drop in profit
Wells Fargo (WFC) reported a nearly 21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} drop in first-quarter profit after rising inflation and interest rates, as well as geopolitical turmoil from Russia’s war in Ukraine put a dent in its core business during the period.
The fourth-largest U.S. lender posted a profit of $3.67 billion, or 88 cents per share, for the three months ended March 31, compared to $4.64 billion, or $1.02 per share, over the same quarter last year.
“Our internal indicators continue to point towards the strength of our customers’ financial position, but the Federal Reserve has made it clear that it will take actions necessary to reduce inflation and this will certainly reduce economic growth,” Chief Executive Charlie Scharf said.
“In addition, the war in Ukraine adds additional risk to the downside.”
Wells Fargo shares were down 3.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading as of 7:30 a.m. ET.
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7:17 a.m. ET: Stock futures little changed as major bank reports trickle in
Here’s where future markets were trading before Thursday’s opening bell:
S&P 500 futures (ES=F): -0.50 points (-0.01{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,441.75
Dow futures (YM=F): +68.00 points (+0.20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,550.00
Nasdaq futures (NQ=F): +2.75 points (+0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,224.25
Crude (CL=F): -$1.20 (-1.15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $103.05 a barrel
Gold (GC=F): -$6.90 (-0.35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,977.80 per ounce
10-year Treasury (^TNX): +6.7 bps to yield 2.7800{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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7:05 a.m. ET: Elon Musk offers to buy Twitter, discloses plans to take company private
Tesla (TSLA) CEO Elon Musk has offered to buy Twitter (TWTR) for $54.20 per share, or about $41 billion in cash, a new SEC filing on Thursday showed. Musk said the social media company he has often criticized must go private in order to make effective changes.
Musk’s offer price represents a 38{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} premium to Twitter’s April 1 close, the last trading day before the billionaire revealed he purchased a 9.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} stake in the company.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk wrote in a letter to Twitter Chairman Bret Taylor, as disclosed in the filing. “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” he added. “Twitter has extraordinary potential. I will unlock it.”
Twitter shares surged 13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in pre-market trading.
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6:10 p.m. ET Wednesday: Futures open flat as Wall Street looks ahead to more bank earnings
Here were the main moves in markets heading into overnight futures trading Wednesday:
S&P 500 futures (ES=F): -4.00 points (-0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,438.25
Dow futures (YM=F): -21.00 points (-0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,461.00
Nasdaq futures (NQ=F): -7.50 points (-0.05{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,214.00
Crude (CL=F): -$0.23 (-0.22{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $104.02 a barrel
Gold (GC=F): -$3.90 (-0.20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,980.80 per ounce
10-year Treasury (^TNX): +6.7 bps to yield 2.7800{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
NEW YORK, NEW YORK – APRIL 12: American flags are seen waving on the New York Stock Exchange 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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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
Read the latest financial and business news from Yahoo Finance
U.S. stocks rose Tuesday, clawing back from a sell-off that started the week as investors assessed fresh inflation data out of Washington that showed prices in March further accelerated to a new 40-year high.
The S&P 500 climbed 0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, and the Dow jumped roughly 130 points at the start of trading. The Nasdaq Composite gained 1.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after closing sharply lower on Monday. Meanwhile, Treasury yields slightly retreated, but the benchmark 10-year yield remained above 2.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, the highest level since January 2019.
The moves follow a down day on Wall Street to start the week marked by mounting worries of an economic slowdown as war in Ukraine, COVID-19 lockdowns in China and the prospect of a more aggressive Federal Reserve weigh on sentiment. Investors look ahead to the start of earnings season and more economic data set for release this holiday-shortened trading week.
Markets are weighing the latest gauge on inflation in the U.S. The Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) rose 8.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in March compared to the same month last year, according to the latest report released Tuesday. The figure marks the fastest rise since December 1981 and follows a 7.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annual increase in February. Heading into the report, consensus economists were looking for an 8.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} jump for March, according to Bloomberg data.
The red-hot print comes as investors grapple with the likelihood Fed officials will act more aggressively to combat inflation after a hawkish readout of minutes last week from the central bank’s March meeting suggested “many” policymakers “would have preferred a 50 basis point increase” in benchmark interest rates last month.
“I think the Fed is already committed to an aggressive rate hike outlook,” Charles Schwab Chief global investment strategist Jeffrey Kleintop told Yahoo Finance Live on Monday. Tuesday’s CPI data “may not have as much impact [on the markets] as it might’ve, say, a few months ago.”
Although investors are largely prepared for the likelihood Fed policymakers will be more combative in their inflation-fighting efforts, worries have emerged that a ramp up in monetary tightening may cause an economic contraction. Strategists have begun to discuss the possibility of a recession more widely in recent weeks, notably with economists at Deutsche Bank recently warning central bank measures could materially slow growth in the second half of 2023.
Some have said it’s too early to make such a call but that the possibility is on the table.
“I would say that it’s probably closer to a coin toss that the economy will be moving into recession by the end of the year,” said Dreyfus and Mellon Chief economist and macro strategist Vince Reinhart on Yahoo Finance Live.
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9:30 a.m. ET: Stocks push forward despite report showing red-hot inflation in March
Here were the main moves in markets during Tuesday’s opening bell:
S&P 500 (^GSPC): +28.07 (+0.64{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,440.60
Dow (^DJI): +100.67 (+0.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,408.75
Nasdaq (^IXIC): +162.91 (+1.21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,574.87
Crude (CL=F): +$4.36 (+4.62{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $98.65 a barrel
Gold (GC=F): +$25.20 (+1.29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,973.40 per ounce
10-year Treasury (^TNX): -6.1 bps to yield 2.7190{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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8:35 a.m. ET: March CPI climbed more-than-expected 8.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over last year
U.S. consumers paid more for a variety of goods and services in March compared to the prior month as price levels across the economy continued to accelerate amid persisting supply and demand disruptions.
The Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) rose 8.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in March compared to the same month last year, according to the latest report released Tuesday. That marked the fastest rise since December 1981. This followed a 7.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annual increase in February. Heading into the report, consensus economists were looking for an 8.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} jump for March, according to Bloomberg data.
With definitive signs of a peak yet to be seen in inflation, members of the Federal Reserve have escalated their rhetoric on using monetary policy tools to bring down fast-rising prices. Last week, Fed Governor Lael Brainard said that bringing down inflation was “our most important task,” while San Francisco Fed President Mary Daly said that high inflation was “as harmful as not having a job.”
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7:10 a.m. ET: Contracts on S&P 500, Dow, and Nasdaq flat as investors await CPI print
Here’s how the main indexes fared in futures trading ahead of Tuesday’s opening bell:
S&P 500 futures (ES=F): +1.25 points (+0.03{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,410.25
Dow futures (YM=F): -1.00 points (-0.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,218.00
Nasdaq futures (NQ=F): +14.25 points (+0.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,014.25
Crude (CL=F): +$3.81 (+4.04{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $98.10 a barrel
Gold (GC=F): +$10.30 (+0.53{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,958.50 per ounce
10-year Treasury (^TNX): +0.00 bps to yield 2.7800{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
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6:40 a.m. ET: US small business sentiment falls as inflation worries rise
Confidence levels among small business owners across the country further waned in March, and a higher number of mom-and pop-shop operators reported inflation as their single most important concern, a survey out Tuesday showed.
The National Federation of Independent Business said its Small Business Optimism Index dropped 2.4 points to 93.2 last month to mark the third straight month of readings below the 48-year average of 98. The index has declined every month this year so far.
Of respondents, 31{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} identified inflation as their single most important problem, up 5 points from February’s survey. The figure is the largest share of participants citing inflation as their biggest concern since the first quarter of 1981, also replacing worries about “labor quality” as the number one problem confronting small businesses.
High inflation caused by shortages, massive fiscal stimulus and low interest rates have pressured the economy in recent months.
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6:10 p.m. ET Monday: Stock futures little change ahead of Tuesday’s inflation data
Here’s where markets were trading ahead of the overnight session on Monday:
S&P 500 futures (ES=F): +2.75 points (+0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,411.75
Dow futures (YM=F): +29.00 points (+0.08{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,248.00
Nasdaq futures (NQ=F): +9.75 points (+0.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,009.75
Crude (CL=F): +$0.97 (+1.03{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $95.26 a barrel
Gold (GC=F): +$9.30 (+0.48{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,957.50 per ounce
10-year Treasury (^TNX): +6.7 bps to yield 2.7800{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., April 11, 2022. REUTERS/Andrew Kelly
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
Read the latest financial and business news from Yahoo Finance
Stocks climbed Friday, developing on Thursday’s rally, as traders continued to assess the financial challenges stemming from Russia’s invasion of Ukraine.
The Dow Jones Industrial Common added about 790 details, or 2.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The blue-chip average is on monitor for its very best working day since late 2020. The S&P 500 gained 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The Nasdaq Composite rose 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.
Shares are coming off a whipsaw investing session Thursday in which the major indexes staged a substantial comeback from steep declines earlier in the working day. The Dow on Thursday erased a far more than 800-level decline to close better.
“Investors who have anticipated elevated volatility in 2022 swiftly came into the market and you happen to be seeing follow-by right now,” Jeff Kilburg, main expenditure officer of Sanctuary Prosperity, explained. “We have been in an oversold affliction. There was an overreaction in the fairness markets to the Ukraine crisis.”
For the week, the Dow is marginally decrease although the S&P 500 and the Nasdaq Composite are good.
Shares of Johnson & Johnson and 3M had been the prime gainers of the Dow on Friday, introducing additional than 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} just about every. Etsy shares led the S&P 500 on Friday, growing close to 15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} following the online marketplace’s quarterly final results defeat analyst estimates.
Shares of Further than Meat tumbled extra than 8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after a disappointing earnings report. Foot Locker shares plunged about 30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} right after the retailer stated 2022 profits will fall as it expects to offer less Nike merchandise.
Market place sentiment got a enhance Friday after the Kremlin reportedly stated that Russian President Vladimir Putin is ready to send a delegation to Belarusian money Minsk for negotiations with Ukraine.
Russia is closing in on the money city of Kyiv, in accordance to Ukrainian officials. The funds experienced been strike by “horrific Russian rocket strikes,” Ukrainian Overseas Minister Dmytro Kuleba claimed.
European Union leaders are talking about imposing sanctions on any European belongings held by Putin and Overseas Minister Sergey Lavrov, two resources explained to CNBC’s Silvia Amaro. It is not very clear irrespective of whether Putin or Lavrov have any significant belongings in the EU.
President Joe Biden on Thursday rolled out a wave of sanctions versus Russia in a wide hard work to isolate Moscow from the world wide economic climate.
“There is certainly chaos on the ground, but you will find clarity on sanctions, and I consider that is in which the industry is using some convenience,” explained Jeff Kleintop, chief worldwide financial commitment strategist at Charles Schwab.
On the details front, the main personalized intake expenditures selling price index, the Federal Reserve’s principal inflation gauge, rose 5.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a yr in the past, the Commerce Division claimed Friday. Economists surveyed by Dow Jones predicted a 5.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} print.
Inventory picks and investing tendencies from CNBC Professional:
The Nasdaq Composite is still in correction, or down additional than 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its record significant. The Dow and S&P 500 are just outdoors of correction territory.
“It is a headline-driven current market, and as we get some resolution and see what transpires with Russia and Ukraine, the concentrate will be back again on the Fed all over again,” Bespoke Investment’s Paul Hickey told CNBC’s “TechCheck” on Friday.
