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LGT Navigator: Major US banks are kicking off earnings season

April 14, 2021

US stock markets were not swayed on Tuesday: despite rising inflation and a setback in the vaccine of Johnson & Johnson, the S&P 500 climbed again to a record high. Several major American banks present their quarterly figures today, kicking off earnings season. 

Earnings season

On Wall Street, the record hunt continued on Tuesday. The S&P 500 advanced +0.3% and closed at a new all-time high. The technology index Nasdaq Composite gained +1.1%. 

In contrast, the Dow Jones lost -0.2%. However, also the Dow curbed the losses towards the close of trading. Trigger for the setback were losses in Johnson & Johnson: The shares of the pharmaceutical company fell -1.3% and were thus among the losers of the day. This, after the US Food and Drug Administration (FDA) recommended to temporarily suspend corona vaccinations with Johnson & Johnson’s vaccine, after side effects occurred. The development also has consequences for the vaccination campaigns in Europe, as the delivery of the vaccine is stopped for the time being.

On Asian stock exchanges, the picture is mixed. The Nikkei loses -0.3% in Tokyo, while the Hang Seng Index (+1.2%) in Hong Kong and the Shanghai Composite (+0.2%) are up.

Market attention today turns to the quarterly reports of US financial heavyweights, with JPMorgan Chase, Goldman Sachs and Wells Fargo kicking off the first-quarter earnings season.

Boom in bitcoin continues

The cryptocurrency bitcoin also rose to new record highs on Tuesday and was temporarily quoted at over USD 63'000 (+5%). The high was fueled by the upcoming IPO of the crypto platform Coinbase, which is expected to make its debut today on Nasdaq. According to estimates, the company could reach a valuation of up to USD 100 billion - Coinbase would thus be valued higher than Intercontinental Exchange, the operator of the New York Stock Exchange. 

US inflation rises in March

Inflation in the US rose slightly more than expected in March. Year-on-year, prices rose by +2.6%, after an increase of +1.7% was registered in the previous month. Analysts had expected an increase of +2.5%. Core inflation, which excludes volatile energy and food prices, rose +1.6% year-on-year, up from +1.3% in February. This was the first time the Federal Reserve's annual inflation target of 2% was exceeded since February 2020. However, the Fed decided last year that inflation can temporarily rise above 2% without tightening monetary policy. Thus, Fed Chairman Jerome Powell has emphasized several times in recent weeks that he sees no danger in the current inflation trend and that the increase is likely to be temporary.

Economic recovery to boost oil demand

Demand for crude oil is likely to be higher this year than previously expected, the Organization of Petroleum Exporting Countries (Opec) estimates in its latest monthly report. It has raised its forecast for global oil demand and expects average demand to reach 96.46 million barrels per day. This represents an increase of around 6 million barrels compared with 2020. In recent months, the cartel had lowered the forecast several times because the spread of the coronavirus had again caused lockdowns. Now, Opec expects travel to increase in the summer and anticipates that progress on vaccinations will boost global economic growth. 

 

 

Economic Indicators Arpil 14

MEZ Country Indicator Last
09:00 EZ Industrial production (y/y) +0.1%
14:30 US Import prices (y/y) +3.0%
14:30 US Export prices (y/y) +5.2%
20:00 US Beige Book

Earnings Calender April 14

Country Corporate Period
US JPMorgan Chase Q1
US Wells Fargo Q1
US Goldman Sachs Q1

 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: lgt.navigator@lgt.com
Source: LGT Bank (Switzerland) Ltd.

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