Bank Earnings Lift Financials as Treasury Yields Ease

Corporate earnings are taking centre stage this morning, with Financials climbing as investors welcome a largely positive first round of big bank results. Overnight weakness in Technology weighed on Asian trading, although US index futures are pointing higher, with NASDAQ futures down 0.7% and Dow futures gaining 0.8%. Energy prices are easing and Metals are generally firmer within their recent trading ranges, while Treasury yields and the US Dollar are backing off.

Goldman Sachs is a standout in early trading, advancing 4.3% after reporting earnings of $17.01 per share against the Street’s $12.86 estimate. Wells Fargo ($1.87 vs $1.85) and Citigroup ($2.85 vs $2.65) also exceeded expectations, while JPMorgan Chase fell short ($5.57 vs $5.93). Outside the banks, UnitedHealth beat estimates ($4.69 vs $4.14, up 3.8% premarket) and raised its guidance. There are no major economic reports scheduled today.

Overseas equity markets were mixed. South Korea’s KOSPI dropped 5.4% and Japan’s Nikkei declined 1.8%, while Hong Kong’s Hang Seng gained 0.3%. European trading is modestly positive, with the DAX up 0.1% and the FTSE advancing 0.5%.

Energy contracts are retreating, with Crude Oil down 1.6% but holding above $92.00/bbl, Brent Crude off 1.8% and slipping below $105.00/bbl, and Gasoline falling 2.7% to near $3.20/gallon. Gold is up 0.5%, reclaiming $4,200/oz, while Silver is gaining 0.3% and Copper is steady near $6.75/lb.

Treasury yields have eased, with the US 10-year yield back below 5.20% and the 30-year yield below 5.60%. The US Dollar Index is down 0.3%, while the Euro and Loonie are each up 0.3%. Attention turns tomorrow to inflation figures from the US and China, alongside earnings from Bank of America, Morgan Stanley, ASML, and BlackRock. BNY Mellon and Alcoa follow on Thursday, with Travelers reporting on Friday.

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