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Home ┬╗ Wall Street is in doubt as the earnings season begins

Wall Street is in doubt as the earnings season begins

Futures linked to the DOW JONES fell 0.16% to 34,134 points. S&P 500 futures were down 0.16% to 4,166 points and NASDAQ 100 futures were down 0.34% to 13,164 points.

Wall Street had a strong day on Thursday as investors cheered the latest data showing inflation is beginning to ease. The Nasdaq Composite Index rose nearly 2%, while the S&P 500 and Dow rose 1.3% and 1.1%, respectively.

The Producer Price Index (PPI) for March, which measures the prices paid by businesses, fell 0.5% from the previous month, although economists polled by Dow Jones expect prices to stay. Excluding food and energy, the index was down 0.1% mom, while economists were estimating a 0.2% mom rise. This data reinforced the easing trend in inflation seen in the March Consumer Price Index (CPI) report released on Wednesday. Consumer prices rose 5% annually, the slowest annual increase in nearly two years.

The dates shine reinforce the thesis of those hoping the Federal Reserve will see inflation falling far enough to end its hike-in campaign in the near futuresays Sam Stovall, chief investment strategist at CFRA Research. “Today’s market movement clearly reflects the continued decline in inflationary pressures – and hence the belief that the Fed is more likely to stop raising rates in one rather than two,” Stovall believes. “Investors are becoming optimistic that times will improve.”

Today, however, the macroeconomic agenda is also under pressure with the release of March industrial production and retail sales and the April preliminary reading of the consumer sentiment index, which is produced monthly by the University of Michigan. Lower-than-expected numbers could see the economy slip back into recession, which will be ill-received by investors.

In business, all eyes are already on the season of earnings reports for the first quarter of the year, which unofficially kicks off today with the results of banking giants JPMorgan Chase, Wells Fargo and Citigroup.

One of the early risers was JPMorgan Chase, which surprised the market with better-than-expected sales but not earnings. The largest US bank by assets reported adjusted earnings per share of $4.32 compared to analyst estimates of $3.41. Sales were $39.340 million compared to $36.190 million the market was expecting.

Beyond the numbers released, “we need to pay attention to what the managers of these companies are saying about how they view and hope for the macroeconomic scenario they face in the coming quarters,” he stresses. Juan J. Fern├índez-Figares of Link Management. “That’s because Issues such as recent developments in credit demand and possible provisioning need to be monitored very closely that they have decided to fund the banks in the face of a potential spike in arrears.”

Another sector that has caught investors’ attention over the past few days has been airlines. Yesterday, American Airlines shares fell 9.22% after the release of some first-quarter results that disappointed the market. Key numbers against the Bloomberg consensus are as follows: earnings per share between $0.01 and $0.05, compared to $0.046 expected; and income of 12,190, below the expected 12,210 million. Full results will be released on April 27th.

Investors are concerned about a possible shift in passenger purchasing behavior toward lower airfares, which also weighed on other major carrier United Airlines, which fell 6.50%.

Pre-opening falls 5% today for the Lucid Group after the electric vehicle maker reported it was shipping fewer of its Air sedans to customers than it was producing. The company produced 2,314 Air in the first quarter and shipped 1,406 Air to customers in the same period. The mismatch between production and deliveries can be interpreted as a sign that demand for the quarter was weaker than expected. Analysts polled by FactSet expected the company to ship about 2,000 Airs in the quarter.

As for fixed income, bond yields are holding steady today after the last few days’ moves in the heat of the inflation numbers. The 10-year note offers a yield of 3.443%, while the 2-year note yields 3.9707%.

In currencies, the EUR/USD has entered a consolidation phase at a yearly high, hovering around 1.1070 greenbacks this morning. Why is the euro rising?

Finally, in commodity markets, oil prices edged higher this Friday, with West Texas a barrel up 0.15% to $82.45. Europe’s benchmark Brent crude rose 0.13% to $86.39 a barrel.

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