Shares fell early in the trading session on Friday, while shares of JPMorgan (JPM) rose as much as 6% after a strong earnings report kicked off a crucial period of earnings.
About 40 minutes into the trading day on Friday, the S&P 500 (^GSPC) was down 0.3%, the The Dow Jones Industrial Average (^DJI) fell 0.5%, and the tech-heavy Nasdaq Composite (^IXIC) fell about 0.5%.
Shares of JPMorgan (JPM) and Citi (C) rose, while shares of Wells Fargo (WFC) were little changed and PNC Financial (PNC) stocking came under pressure after each bank reported its results ahead of the open. of Friday.
In early trading on Friday, JPMorgan shares rose 6%, while Citi gained 2.4% and Wells Fargo was little changed.
Economic data also sent markets moving early Friday with the University of Michigan’s April Consumer Confidence Preliminary Look indicating a pick-up in consumer inflation expectations, which investors took as a sign that the Federal Reserve will need to remain vigilant in keeping interest rates high.
Consumer expectations for price increases over the next year rose to 4.6% from 3.6% last month, the report showed. Stocks lost modest gains after these headlines.
“These expectations have been fluctuating for four consecutive months, alternating between increases and decreases,” said Joanne Hsu, director of the consumer survey. “Uncertainty about near-term inflation expectations remains remarkably elevated, indicating that the recent volatility in inflation forecasts for the coming year is likely to continue.”
Overall, the report showed sentiment was “essentially unchanged” in April, as the index stood at 63.5, up from 62 at the end of March. These data came about an hour after Fed Governor Chris Waller reiterated in a speech that inflation remains “too high.”
Elsewhere on the economic calendar, the monthly retail sales report showed sales fell 1% in March, while industrial production data came in better than expected.
“In general, [retail sales were] not as bad as we expected,” wrote Paul Ashworth, chief North America economist at Capital Economics. “Thanks to a strong January, real consumption growth in the first quarter should be close to 4.5%, with GDP growth 1.8%, which could be enough to persuade the Fed to raise a final 25bp in early May.”
Bank results shine
JPMorgan, the nation’s largest bank by assets, posted shares up as much as 5% after reporting headline results that were up from a year earlier.
Deposits, which will be closely watched by investors this quarter after the failure of three US banks in March, rose 1.5% over the quarter at JPMorgan. However, compared to the same period last year, deposits fell 7%.
In the company’s earnings report, Chief Executive Officer Jamie Dimon said: “The US economy remains on a generally healthy footing: consumers continue to spend and have strong balance sheets, and businesses are in good shape. However, the storm clouds we have been monitoring for the past year remain on the horizon, and turmoil in the banking industry adds to these risks.”
Wells Fargo also reported both top and bottom line results that were up from a year ago, with revenue topping $20.7 billion in the first quarter.
Consumer deposits fell 5% from a year ago, while commercial bank deposits were down 15% from the first quarter of 2022. Wells Fargo reported that its loans to business customers were up 15% from to the same period last year.
Wells Fargo CEO Charlie Scharf said in a statement: “We are pleased to have been in a strong position to help support the US financial system during recent events affecting the banking industry.”
Citi reported revenue and revenue that were up 7% and 12% year-over-year, respectively, while noting that its deposits stood at $1.3 trillion at the end of the quarter, “virtually unchanged” from a year earlier, the company said in its statement. Chief Executive Jane Fraser said the company’s performance came “despite the tumultuous environment for banks.”
On the earnings side, BlackRock (BLK) results showed the impact last year’s market turmoil had on investors, as the company’s average assets under management fell below $9 trillion. during the first quarter, compared to $9.7 trillion in the same quarter last year. The asset management giant’s revenue also fell 10% from a year earlier to $4.24 billion.
“BlackRock is a source of stability and optimism for customers,” CEO Larry Fink said in a statement. “We are helping clients navigate volatility and build resiliency into their portfolios, while providing insight into long-term opportunities in today’s markets.”
Elsewhere on the earnings calendar, UnitedHealthcare (UNH) shares were lower in early trading after the company reported results that beat estimates and raised its full-year 2023 outlook.
Meanwhile, shares of Boeing (BA) fell as much as 6% early Friday after the company announced it would suspend deliveries of some 737 Max jets.
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