Futures rise with bank earnings in focus

Darnell Taylor
July 15, 2020

Citing statistics, on Monday's Wall St. wrap-up, the Dow ended down the day 0.04 per cent higher to 26,085.8 and S&P 500 shed 0.94 per cent to 3,155.22 following a 2.12 per cent decline at its technology index, while leading the losses on the day's Wall St., Nasdaq had shrugged off as much as 2.13 per cent to close the day at 10,390.84. According to the Bureau of Labor Statistics, the headline consumer price index rose at a 0.6% month-on-month pace, pushing the year-on-year rate of growth from 0.1% for May to 0.6% in June. The Nasdaq Composite Index increased 97.73 points, or 0.94 percent, to 10,488.58.

Limiting gains in the Nasdaq and S&P 500, Amazon lost ground, extending a rotation that began Monday out of many big-name technology and momentum stocks that have led much of the USA stock market's rebound since March.

Volatility remained high. US stocks finished in the red yesterday after the S&P 500 briefly touching the highest level since the coronavirus pandemic. It's finally caught up with these names everybody's been hiding in. The index rose 1.3% on Tuesday.Japan's Topix index gained 1.3%.Hong Kong's Hang Seng slid 0.5%.The Shanghai Composite fell 1.4%.South Korea's Kospi index climbed 0.6%.Australia's S&P/ASX 200 Index gained 1.5%.Euro Stoxx 50 futures advanced 1.3%.

Wall Street is ticking higher Tuesday afternoon after pinballing through another day of unsettled trading.

You've had headlines about COVID and layoffs and the economy.

But several major banks reported significant profits despite the pandemic, including JPMorgan Chase, which posted a record $33.8 billion in revenue even as its profits dropped by half from past year, to $4.7 billion.

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JP Morgan Chase reported forecast-beating second-quarter numbers after heightened market volatility delivered record trading revenues and helped offset a weaker performance in retail banking, while Citigroup posted better-than-expected second-quarter earnings as a surge in trading revenues helped offset a slowdown in its banking unit.

Wells Fargo, though, dropped 5.7% after it said it expects to cut its dividend. "Banks are the foundation of our US economy". Investors were discouraged to see that California extended a shutdown of bars and indoor dining and ordered gyms, churches and hair salons closed in most places as coronavirus cases keep rising. Citigroup Inc was also down 2.7% as it reported a steep fall in quarterly profit.

US equity futures erased gains and European stocks dropped as investors weighed earnings season and the economic hit of rising virus cases.

And four out of five of the big stocks in the S&P; 500 were higher.

In Europe, France's CAC 40 fell 1%, and Germany's DAX lost 0.8%.

Recent economic data has strengthened belief that the stimulus-pumped USA economy is on the road to recovery, helping investors look past a recent spike in US infections. Brent crude, the global standard, gained 0.3% to $42.83 per barrel.

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