The kickoff to earnings season has been a mostly positive one with several banks and other companies beating street expectations including JPMorgan Chase ($3.57 vs street $3.08), Bank of America ($0.85 vs street $0.77), Wells Fargo ($0.67 vs street $0.60), UnitedHealth ($5.34 vs street $5.17), Blackrock ($8.93 vs street $8.13), and Delta Airlines ($1.48 vs street $1.32). Citigroup was the most notable miss ($1.10 vs street $1.14). With the exception of Blackrock, however, every one of the major companies reporting is down in premarket trading including declines of 2.9% for JPMorgan, 3.9% for Wells Fargo, and 5.3% for Delta.
Although JPMorgan’s management forecasting a mild recession for this year has been getting attention in the business press this morning, it appears that today’s selloff may primarily be related to investors electing to take profits against the earnings news and ahead of a US long weekend (US exchanges are closed Monday for Martin Luther King Day). US markets have been climbing in recent days, including a 5-day winning streak for the NASDAQ, and airline stocks had already soared yesterday on a positive preannouncement from American Airlines.
US Index futures are down 0.7% to 1.0% so far this morning, while major European indices are essentially flat. Commodities are under pressure this morning, particularly metals with Copper and Silver both down about 1.1%, and Platinum down 2.1%. Energy markets are mixed with WTI Crude Oil up 0.3% and Natural Gas down 2.8%.