Upbeat Earnings, Retail Sales Data May Generate Buying Interest
April 15 2024 - 9:10AM
IH Market News
The major U.S. index futures are currently pointing to a higher
open on Monday, with stocks likely to regain ground following the
sell-off seen last Friday.
A positive reaction to earnings news from Goldman Sachs
(NYSE:GS) may generate early buying interest, as the investment
banking company is surging by 4.1 percent in pre-market
trading.
The jump by Goldman Sachs comes after the company reported first
quarter earnings that far exceeded analyst estimates on better than
expected revenues.
Positive sentiment may also be generated in reaction to a
Commerce Department report showing much stronger than expected U.S.
retail sales growth in the month of March.
The Commerce Department said retail sales climbed by 0.7 percent
in March after advancing by an upwardly revised 0.9 percent in
February.
Economists had expected retail sales to rise by 0.3 percent
compared to the 0.6 percent increase originally reported for the
previous month.
Excluding a pullback by sales by motor vehicle and parts
dealers, retail sales jumped by 1.1 percent in March after climbing
by 0.6 percent in February. Ex-auto sales were expected to rise by
0.4 percent.
Bargain hunting may also contribute to an early rebound on Wall
Street, as traders pick up stocks at relatively reduced levels.
The steep drop seen last Friday dragged the Dow down to its
lowest closing level in well over two months, while the S&P 500
fell to a nearly one-month closing low.
U.S. stocks closed sharply lower on Friday, as geopolitical
tensions, inflation worries and mixed earnings and guidance from
major banks rendered the mood a bit bearish.
The major averages all ended in the red. The Dow ended with a
loss of 475.84 points or 1.2 percent at 37,983.24. The S&P 500
tumbled 75.65 points or 1.5 percent to 5,123.41, while the Nasdaq
settled at 16,175.09, plunging 267.10 points or 1.6 percent.
The Dow shed nearly 2.5 percent for the week, while the S&P
500 and the Nasdaq dropped by about 1.6 percent and 0.5 percent,
respectively.
Shares of Citigroup (NYSE:C) fell by about 1.7 percent after the
company reported a 27 percent drop in net income in the first
quarter, due to lower non-interest revenue, as well as higher
expenses and cost of credit.
JPMorgan Chase & Co. (NYSE:JPM) tumbled nearly 6.5 percent,
weighed down by lower net interest income. The lender reported a 6
percent increase in first quarter profit. For the first quarter,
net income increased to $13.42 billion or $4.44 per share from
$12.62 billion or $4.10 per share in the prior-year quarter.
Wells Fargo Inc (NYSE:WFC) reported first-quarter net income of
$4.62 billion or $1.20 per share, down from last year’s $4.99
billion or $1.23 per share. The stock ended modestly lower.
Inflation concerns continued to weigh on the markets, as the
Labor Department released a report showing import prices in the
U.S. increased by slightly more than expected in the month of
March.
The report said import prices climbed by 0.4 percent in March
after rising by 0.3 percent in February. Economists had expected
import prices to increase by another 0.3 percent.
Import prices also rose by 0.4 percent compared to the same
month a year ago, marking the first year-over-year increase since
January 2023.
Meanwhile, the Labor Department said export prices rose by 0.3
percent in March after climbing by a revised 0.7 percent in
February. The increase in export prices matched economist
estimates.
Compared to the same month a year ago, export prices were down
by 1.4 percent in March following a 1.8 percent slump in
February.
A report showing a bigger than expected drop in consumer
sentiment in April also generated selling pressure. The University
of Michigan said its consumer sentiment fell to 77.9 in April from
79.4 in March. Economists had expected the index to edge down to
79.0.
The report also said year-ahead inflation expectations rose to
3.1 percent in April from 2.9 percent in March, climbing just above
the 2.3-3.0 percent range seen in the two years prior to the
pandemic.
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