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Stocks trade poorly amid big bank earnings

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Stocks rose on Wednesday as traders digested a slew of big bank earnings that far exceeded expectations. The Dow Jones set a new record as Goldman Sachs shares rose after the company reported better-than-expected quarterly results.

The S&P 500 traded slightly higher, after the index jumped to record intraday and closing highs on Tuesday, and the Nasdaq edged up slightly to return above 14,000.

Investors received results Wednesday morning from banks including JPMorgan Chase (JPM) and Goldman Sachs (GS), which set the tone for the rest of the first quarter earnings reports in the coming weeks. JPMorgan Chase’s investment banking and equity and bond trading income far exceeded estimates, and company profits increased after the bank released $ 5.2 billion in reserves for loan losses, which had been reinforced in the event of loan deterioration during the pandemic. Goldman Sach’s results far exceeded estimates on booming investment banking and trading income.

For all of the S&P 500 companies, Wall Street analysts expect corporate profits to rise from last year, with a firming economic environment and strong consumer spending expected to boost growth. business results.

We could see profit growth of over 30% year over year in the first quarter. It would be the most we’ve seen since coming out of the financial crisis, ”Ryan Detrick, chief market strategist at LPL Financial, told Yahoo Finance. Profit growth of around 25% is expected in the first quarter. And let’s not forget what happened in the previous two quarters: massive and massive paces.

“That bar is a bit higher, but we believe that once again American companies are going to step up and justify a lot of the valuations that we see here,” he added.

Other risky assets also traded near all-time highs. Bitcoin (BTC-USD) prices hit a record high of over $ 64,000, with cryptocurrency exchange platform Coinbase (COIN) set to go public in a direct listing on Wednesday.

12:13 p.m. ET: Fed Chairman Powell says rates take off unlikely until 2022

Federal Reserve Chairman Jerome Powell, speaking practically at the Economic Club in Washington, DC, reiterated on Wednesday that a short-term move in interest rates remained unlikely, given the ongoing precarious recovery in course amid the ongoing pandemic.

Before 2022, it would be this year. I think that would be highly unlikely, “as far as rising interest rates from current near zero levels are concerned,” Powell said.

He added, however, that the Federal Reserve would likely start cutting back on its bond buying program before moving on to interest rates.

10:22 a.m. ET: Coinbase Says To Open At $ 340 Per Share After Benchmark Price Of $ 250 On Nasdaq

Coinbase shares were reported to open at $ 340 per share during the share’s public debut on the Nasdaq, after the share’s benchmark price was set at $ 250 per share on Tuesday.

The Coinbase cryptocurrency exchange goes public via a direct listing, which differs from a traditional initial public offering in that no new shares will be issued in the process. Instead of, existing shareholders will sell shares directly to the public.

Coinbase’s opening transaction could still fluctuate significantly from this listed price, as the price discovery process takes place throughout the morning.

9:30 a.m. ET: Mixed Open Equity

Here’s where the markets were trading shortly after the opening bell:

  • S&P 500 (^ GSPC): -1.25 point (-0.03%) to 4.140.34

  • Dow (^ DJI): +11.06 points (+ 0.03%) to 33,688.33

  • Nasdaq (^ IXIC): +4.34 (+ 0.03%) to 14,001.37

  • Gross (CL = F): + $ 1.28 (+ 2.13%) to $ 61.46 per barrel

  • Gold (GC = F): – $ 13.00 (-0.74%) to $ 1734.60 per ounce

  • 10-year cash flow (^ TNX): +1.8 bps for a yield of 1.641%

7:36 a.m. ET: Stock futures mixed amid bank profits

Here’s where the markets were trading before the opening bell:

  • S&P 500 Futures (ES = F): 4,136.50, up 3.75 points or 0.09%

  • Dow Futures (YM = F): 33,554.00, down 16 points or 0.05%

  • Future Nasdaq (NQ = F): 14,015.50, up 39.75 points or 0.28%

  • Gross (CL = F): + $ 0.91 (+ 1.51%) to $ 61.09 per barrel

  • Gold (GC = F): -4.00 $ (-0.23%) to 1743.60 $ per ounce

  • 10-year cash flow (^ TNX): + 0.4bp for a yield of 1.627%

7:31 am ET: Goldman Sachs shares surge after easily beating first quarter estimates, amid surge in investment banking and trading income

Goldman Sachs reported first quarter revenue that more than doubled from a year ago, as investment banking and trading activities increased in the first three months of the year.

The net revenue of $ 17.70 billion is well above the expected $ 12.55 billion and $ 8.74 billion from the previous year. The pace came amid a 47% rise in trading income, with share sales and trades alone rising 68%. Earnings per share of $ 18.60 was also much better than expected $ 10.06, and net interest income of $ 1.48 billion was up 13% from last year.

We have worked hard alongside our customers to prepare for a world beyond the pandemic and a more stable economic environment, ”said David Solomon, CEO of Goldman Sachs said in a statement. “Our businesses remain uniquely positioned to help our customers reposition themselves for the recovery, and this strength is reflected in the record revenues and profits achieved this quarter.

7:18 a.m. ET Wednesday: JPMorgan Chase Q1 revenue beats estimates, with profits increased by $ 5.2 billion in released loan loss reserves

JPMorgan Chase (JPM) posted Adjusted first quarter revenue significantly exceeded expectations, and beat earnings per share estimates as the company freed billions of dollars in substantiated provisions during the pandemic to guard against deteriorating loans.

Adjusted revenue of $ 33.12 billion increased 14% year over year, each from investment banking, fixed income and trading sales and equity sales and income trading easily exceeding estimates. In the end, earnings per share of $ 4.50 was higher than the expected $ 3.01, according to Bloomberg consensus data, with that earnings boosted by $ 5.2 billion in net reserve releases. However, the forecast for net interest income or profits from the company’s core lending activities came in at $ 55 billion, slightly below the expected $ 55.12 billion.

JPMorgan’s results reflect a strong underlying performance across our business, driven in part by a rapidly improving economy, ”CEO Jamie Dimon said in a press release. . We believe our $ 26 billion in credit reserves are appropriate and prudent, all things considered.

Dimon added that the company’s consumer and community banking segment had returned to pre-pandemic levels, with consumer spending increasing 14% in the first quarter of 2019. Travel and entertainment increased by more than 50% in March compared to February, he added. .

With all the stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and business balance sheets, and the euphoria around the potential end of the pandemic, we believe the economy has the potential for extremely robust multi-year growth. “Said Dimon.

6:05 p.m. ET Tuesday: Trading in equity futures was little changed

Here’s where the markets were trading Tuesday night:

  • S&P 500 Futures (ES = F): 4,133.75, up 1 point or 0.02%

  • Dow Futures (YM = F): 33 570, unchanged

  • Future Nasdaq (NQ = F): 13,976.00, up 0.75 points or 0.01%

A Wall St sign hangs from the New York Stock Exchange (NYSE) on Wall Street on March 23, 2021 in New York City.  - Wall Street stocks came under pressure early before Federal Reserve Chief Jerome Powell testified in Congress as U.S. Treasury bond yields continued to fall.  (Photo by Angela Weiss / AFP) (Photo by ANGELA WEISS / AFP via Getty Images)

A Wall St sign hangs from the New York Stock Exchange (NYSE) on Wall Street on March 23, 2021 in New York City. – Wall Street stocks came under pressure early before Federal Reserve Chief Jerome Powell testified in Congress as U.S. Treasury bond yields continued to fall. (Photo by Angela Weiss / AFP) (Photo by ANGELA WEISS / AFP via Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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