Stocks Retreat As US Earnings Start To Roll Out

US equities and indices had advanced quite significantly since the last earnings season, implying a significant ramp up in investor expectations for the earnings season which starts today. Initial reaction to results suggests that so far, investors appear to be looking to results for reasons to take profits.  

The reaction to non-bank results has been particularly troubling. Recall that in late December both FedEx and Nike were hammered after reporting positive earnings and disappointing guidance. This morning, despite positive earnings UnitedHealth ($6.16 vs street $5.98, down 4.8% premarket) and Delta Air Lines ($1.18 vs street $1.16, down 5.6% premarket) are down significantly in premarket trading.

The main focus of results today, and really for the next week is on the Financial sector. Big Banks reporting today include Bank of America ($0.35 vs street $0.53, down 2.4% premarket), JPMorgan Chase ($3.04 vs street $3.32, up 12.3% premarket), Citigroup (up 1.8% premarket) and Wells Fargo ($0.81 in line, down 1.2% premarket. Asset manager Blackrock is also out today ($9,66 vs street $8.87, down 1.1% premarket).  

US index futures are down 0.3%-0.6% so far this morning. European markets are up so far today with the Dax, CAC and FTSE climbing 0.6%-0.8%. The US 10-year treasury note yield is steady pretty much sitting on 4.00%. US Producer Prices (1.8% vs street 1.9%) were slightly better than expected partially offsetting yesterday’s higher consumer prices. With tensions rising around shipping in the Red Sea and near the Horn of Africa, Crude Oil is rallying today with US and Brent Crude both up about 2.9%. Falling temperatures in North America has Natural Gas popping 3.9%.

A day after the launch of Spot Bitcoin ETFs in the US, Bitcoin itself is down 1.4%. Perhaps due to more mainstream competition, cryptocurrency exchange Coinbase is down 18.4% year to date, including a drop of 6.7% yesterday and is down 1.2% in premarket trading today. Gold is up 1.7% and Silver is up 2.5%. Copper is up 0.1%

SIA Wealth In The Media

Portfolio Manager and Chief Market Strategist recently appeared on BNN Bloomberg where he spoke about current trends in world market heading into earnings season. Replay links are available below:

U.S. presidential cycle has been volatile since 2000: Cieszynski

U.S. bank earnings preview

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