LIVE MARKETS Bank stocks stumble as Q4 earnings gate opens

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  • Nasdaq barely higher; S&P, Dow in the red
  • Financials is biggest S&P sector loser, Energy is biggest gainer
  • U.S. retail sales slide
  • STOXX down ~0.6%
  • Crude, gold, dollar, Bitcoin all up

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BANK STOCKS STUMBLE AS Q4 EARNINGS GATE OPENS (1005 EST/ 1505 GMT)

Some of the biggest U.S. banks kicked off earnings season on Friday with a sickening thud for investors with JPMorgan (JPM.N) tumbling 4.8% and Citigroup (C.N) down 2.4% after their reports. Only Wells Fargo shares were in demand with a 1.4% gain.

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The S&P 500 bank index (.SPXBK) was last trading down 2.0% on the day after hitting an intraday record high in the previous day's session. It ended up Thursday 10.4% so far for 2022 after rising 32.3% in 2021.

While JPMorgan - the largest U.S. bank that is a barometer of the economy's health - beat Wall Street's expectations even as it reported a 14% profit decline due to a slowdown in trading which offset a stellar performance in investment banking.

Trading revenue fell 13% while investment banking revenue surged 28% thanks to a bumper deal year. read more

UBS analyst Erika Najarian wrote in a note ahead of the conference call that JPM's slides show its outlook for $77 billion in expenses is 6% above consensus.

"This does not fit the "beat and raise" narrative investors have for banks in 2022," she said.

Citigroup reported a 26% slump in fourth-quarter profit on Friday as it took a hit from higher expenses and weakness at its consumer banking unit. read more

However, Wells Fargo beat analyst profit estimates in the quarter as a rebound in U.S. economic growth encouraged more customers to take loans and the bank kept a tight lid on costs. read more

Still, the news made investors anxious about other big banks due to report results next week with Morgan Stanley (MS.N) falling 2.6% and Goldman Sachs (GS.N) off 2.4%.

(Sinéad Carew)

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WALL STREET POISED TO REMAIN RISK-OFF (0915 EST/1415 GMT)

Stock futures on Wall Street traded lower on Friday after U.S. retail sales dropped in December instead of staying flat and banking results at the start of earnings seasons failed to provide a reason for budging the risk-off sentiment.

Retail sales fell 1.9% after rising 0.2% in November, the Commerce Department said, while economists polled by Reuters had forecast retail sales unchanged.

Shares of JPMorgan Chase & Co (JPM.N) slid after it posted a 14% decline in fourth-quartre earnings due to a slowdown in the company's trading arm. But results sailed past analysts' estimates on stellar results from its investment banking unit. read more

Citigroup (C.N) also slid after the the bank reported a 26% drop in quarterly profit. But the company exceeded market expectations as strong gains in its investment banking business cushioned the blow from higher expenses. read more

But shares of Wells Fargo & Co gained in pre-market trade after posting a greater-than-expected rise in fourth-quarter profit. read more

Futures for the Dow Industrials , S&P 500 and the Nasdaq were all down about 0.8% prior to the opening bell.

Here's a snapshot the market:

for Jan 14

(Herbert Lash)

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