AOF analysis before the opening of Wall Street
(AOF) – US stock markets are expected to decline after closing higher yesterday after inflation numbers. This final session of the week marks the start of quarterly results from America’s major banks. While JP Morgan and Bank of America posted better-than-expected fourth-quarter profits, the same did not apply to Wells Fargo, which saw a 50% drop in profits. S&P 500 and Nasdaq Composite futures lost 0.85% and 1%, respectively, minutes before the first trades.
Yesterday on Wall Street
US stock markets closed higher after long-awaited inflation data. These met expectations perfectly. Inflation slowed to 6.5% on an annual basis in December for the sixth month in a row. This good news was already expected by the American indices, which advanced on Tuesday and Wednesday. In terms of values, American Airlines is benefiting from growth in its outlook. Dow Jones index increased by 0.64% to 34,189 points, Nasdaq increased by 0.64% to 11,001 points.
Macroeconomic indicators
In the US, import prices for December increased by 0.4%, while it is expected to decrease by 0.9%. In November, they decreased by 0.7% (revised from -0.6%).
The University of Michigan consumer confidence index for January will be released at 4:00 p.m.
Values to follow
Bank of America
Bank of America posted better-than-expected fourth-quarter profits, boosted by monetary tightening that led to higher interest rates on loans issued by banks. The bank’s net profit, group share, increased 2% during the period to $6.9 billion, against $6.77 billion a year ago. The Bloomberg consensus was 85 cents per share, versus a forecast of 78 cents.
Blackrock
BlackRock reported a sharp drop in fourth-quarter profit. The world’s largest asset manager saw its net profit fall 23% to $1.26 billion, or $8.29 per share. It came in at $8.93, adjusted for exceptional items, beating the FactSet consensus of $8.13. At the same time, its turnover fell 15% to $4.34 billion, slightly beating expectations.
Delta Airlines
American company Delta Airlines, which lost its title by 5.30% in pre-market trading, announced its fourth quarter results. Net income for the period was $828 million, or $1.29 per share, down 25% from 2019. Revenue was $13.43 billion, up 17% from the December 2019 quarter.
JP Morgan
JPMorgan reported higher and better-than-expected fourth-quarter results amid a jump in interest income. Net income rose 6% to $11 billion, or $3.57 per share. Analysts were targeting $3.08 per share. Revenue rose 18% to $34.55 billion, driven by a 48% increase in interest income to $20.3 billion. The market was targeting $34.35 billion in total revenue and $19 billion in interest income.
Southwest Airlines
Southwest Airlines is the target of a lawsuit filed by shareholders Thursday, weeks after the company stranded thousands of passengers nationwide during the holiday season. The suit, filed in federal court in Houston, alleges that airline executives made “false and misleading statements” to hide Southwest’s vulnerability to the problems that led to the year-end fiasco.
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Tesla has reduced the prices of its electric cars in the US and Europe. Here’s what the manufacturer’s website showed: the decision expands a new strategy of aggressive cuts following last week’s lower-than-expected deliveries and reductions in Asia. According to Reuters estimates, price cuts on the Model 3 sedan and Model Y crossover SUV range between 6% and 20% in the US.
Wells Fargo
Wells Fargo, whose stock was down 3.2% in premarket trading, reported a 50% drop in fourth-quarter profit. The American bank had to pay regulatory fines and increase its reserves for credit risk. Wells Fargo reported earnings of $2.86 billion, or 67 cents per share, compared with $5.75 billion, or $38 per share, a year earlier. The consensus was 60 cents a share.
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