April 23, 2024

Stocks fluctuate as earnings season kicks off, wholesale inflation cools

Stocks backtracked Friday afternoon, shedding earlier gains as big bank results failed to lift hopes for a robust quarterly earnings season.

The Dow Jones Industrial Average (^DJI) lost 0.5%, or close to 200 points. The benchmark S&P 500 (^GSPC) slipped 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) shed close to 0.2%

Wall Street lenders kicked off fourth quarter earnings, seen as a crucial chance for stocks to shake off the losses built in the year so far. JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC) all posted decent results on Friday. But the latter two saw shares fall as they failed to settle nerves about potential pain ahead.

The markets punished airline stocks to cap the week. United Airlines (UAL) fell by more than 9% while American Airlines (AAL) and Delta (DAL) decreased by more than 8%. Delta reported earnings earlier in the day and while the company beat estimated for the top and bottom lines, it did trim its 2024 earnings forecast. Elsewhere, Meta (META) nearly completed a stunning reversal, reaching a 52-week high in intra-day trading, climbing back from a staggering drop in its stock price in 2022. The social media company is within 2% of its all-time high.

Also in focus, oil prices jumped more than 1% after the US and its allies launched airstrikes against Houthi rebels in Yemen, drawing threats of reprisals from the Iran-backed group behind Red Sea attacks on shipping. Brent futures (BZ=F) traded around $80 a barrel, while West Texas Intermediate futures (CL=F) were just under $73.

Meanwhile, investors are looking for more insight into price pressures after the consumer CPI reading came in hotter than expected on Thursday. In a turnabout on Friday, the Producer Price Index showed an unexpected fall in prices last month, boosting hopes that inflation will continue to cool in the months ahead.

Live6 updates

  • Citigroup reveals plans for 20,000 job cuts by 2026

    Citigroup (C) is on its way to becoming the smallest of the big four US banks by staff, as CEO Jane Fraser bets on a dramatic restructuring to boost the company’s stock price.

    The New York bank said that it expects to eliminate 20,000 positions by 2026, which will save it $2.5 billion, reports Yahoo Finance’s David Hollerith. Citigroup also intends to shed another 40,000 when it lists its Mexican consumer unit Banamex in an initial public offering.

    The cuts would leave Citigroup with 180,000 workers, which would likely make it the smallest of the big four banks in the US and reduce the overall size of its workforce by 25%. It ended 2023 with 240,000.

    The announcement arrived as Citigroup reported a net loss of $1.8 billion in the fourth quarter resulting from an FDIC assessment of $1.7 billion and other charges and reserves it previously disclosed.

    Shares were down more than 1% around midday.

  • Oil prices rise after US airstrikes in Yemen

    Tensions in the Middle East continue to rise after US-led airstrikes against Yemen’s Houthi rebels escalate the threat of further hostilities and fuel more volatility in the market.

    Oil prices jumped 2% higher during morning trading on Friday after the airstrikes, which were coordinated by the US and UK military. The strikes came in response to Houthi attacks on shipping vessels in the Red Sea, which have forced forcing global shipping companies to reroute their ships, extending the length of the voyages and increasing their cost.

    The Red Sea flows to the Suez Canal, offering vessels the shortest passage between Europe and Asia. Roughly 10% of all global trade travels through the key international sea lane.

    The airstrikes drew threats of reprisals from the Iran-backed group behind the Red Sea attacks, heightening the possibility of further disruptions to global trade.

    Brent futures (BZ=F) were trading around $80 a barrel, while West Texas Intermediate futures (CL=F) were just under $74.

  • Stocks trending in morning trading

    Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday:

    BlackRock (BLK): Shares of the money manager ticked just over the flatline Friday morning after it beat earnings expectations and disclosed that its assets under management exceeded $10 trillion in the fourth quarter of 2023. The company also announced it was acquiring infrastructure fund manager GIP for $12.5 billion. GIP has over $100 billion in assets under management.

    Delta Air Lines (DAL): The airline’s shares sank more than 7% after it cut its 2024 earnings forecast and as investors downplayed its fourth-quarter beat for revenue and profits. Delta reported generating $13.66 billion in revenue and gains of $1.28 per share.

    JPMorgan Chase (JPM): Shares of the largest US bank rose 1% after it reported a 12% boost in revenue to $39.94 billion and beat analysts’ expectations. All told, the bank posted almost $50 billion in annual profits for 2023. Among the large banks that reported results on Friday, JPMorgan led the gainers during the morning session.

    Major US lenders showed sinking profits for the fourth quarter. Wells Fargo (WFC) fell nearly 3%, Bank of America (BAC) slid more than 2%, and Citigroup (C) ticked up about 0.3%.

  • Stocks gain slightly, moving past bank earnings

    Stocks edged up Friday morning as investors largely looked past big bank results that failed to thrill

    The Dow Jones Industrial Average (^DJI) ticked up 0.1% or about 50 points. The benchmark S&P 500 (^GSPC) gained 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) advanced about 0.3%.

  • That’s a 10 … followed by 12 zeros

    BlackRock (BLK) announced Friday its assets under management topped $10,000,000,000,000 at the end of the fourth quarter, with last year’s rally in markets bringing client assets over this threshold for the first time in two years.

    The firm’s AUM tallied $10,008,995,000,000, to be precise, as of Dec. 31.

    During 2023, BlackRock saw $289 billion of net inflows, with the $96 billion in assets that flowed into the firm’s products during the fourth quarter marking the second-best quarter of the year. In Q1, some $110 billion in net assets moved into BlackRock vehicles.

    Alongside its quarterly results on Friday, BlackRock also announced it acquired infrastructure fund manager GIP for $12.5 billion. GIP has over $100 billion in assets under management.

  • Jamie Dimon again warns on ‘stickier’ inflation, higher interest rates

    JPMorgan (JPM) reported fourth quarter results early Friday that capped a record year for the country’s largest bank.

    And inside the firm’s fourth quarter release, investors got another expansive view on the US and global economy from its outspoken CEO, Jamie Dimon.

    Largely reiterating his view that investors are too complacent with the idea inflation is on a smooth path back to the Federal Reserve’s 2% target and interest rates will remain higher than forecasters expect, Dimon said a host of “unprecedented” factors in markets means the bank “must be prepared for any environment.”

    Here are Dimon’s comments in full, with our emphasis and spacing added:

    The U.S. economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing. It is important to note that the economy is being fueled by large amounts of government deficit spending and past stimulus.

    There is also an ongoing need for increased spending due to the green economy, the restructuring of global supply chains, higher military spending and rising healthcare costs. This may lead inflation to be stickier and rates to be higher than markets expect. On top of this, there are a number of downside risks to watch.

    Quantitative tightening is draining over $900 billion of liquidity from the system annually, and we have never seen a full cycle of tightening. And the ongoing wars in Ukraine and the Middle East have the potential to disrupt energy and food markets, migration, and military and economic relationships, in addition to their dreadful human cost. These significant and somewhat unprecedented forces cause us to remain cautious. While we hope for the best, the past year demonstrated why we must be prepared for any environment.

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