A combination file photo shows Wells Fargo, Citigbank, Morgan Stanley, JPMorgan Chase, Bank of America, JPMorgan, and Goldman Sachs from Reuters archive. REUTERS/File Photos
April 12, 2019
By Matt Scuffham
NEW YORK (Reuters) – JPMorgan Chase & Co’s better-than-expected first-quarter earnings raised expectations that rival Wall Street lenders would follow suit when they report next week, pushing most bank stocks higher on Friday.
Shares in JPMorgan jumped as much as 4.7 percent in morning trading, touching a more than four-month high before paring some gains.
Morgan Stanley shares were up 3.8 percent and Bank of America Corp rose 2.8 percent. Goldman Sachs Group Inc and Citigroup shares both climbed 2 percent.
JPMorgan is the largest U.S. bank by assets and a bellwether for the U.S economy and financial sector. It reported strong results across its businesses, with Chief Executive Jamie Dimon citing solid U.S. economic growth, moderate inflation and robust consumer and business confidence.
Even a 10 percent fall in JPMorgan’s trading revenue from a year earlier was viewed as boding well for others, since analysts had been bracing for a bigger drop in fixed-income and equities trading.
“JPMorgan had a positive read-across for trading results in the quarter,” said KBW analyst Brian Kleinhanzl. “We believe FICC (fixed income, commodities and currencies) trading should be a positive read-across to Goldman Sachs and Morgan Stanley.”
Bank stock investors appeared to zero in on JPMorgan and ignore Wells Fargo & Co, the other big bank that reported on Friday.
Wells Fargo reported higher first-quarter earnings but lowered its forecast for net interest income this year, a move that sent its shares tumbling as much as 3 percent.
U.S. bank stocks had underperformed in recent months as economists and investors fixated on a flattening yield curve, normally the precursor to a recession. Bank executives have downplayed those concerns, pointing to continuing loan growth in the first quarter of 2019.
Since the start of December, the S&P 500 financial sector is up 0.3 percent, while the overall S&P 500 is up 5 percent. The S&P 500 banks index fell 2.5 percent over the same period. Brushing aside global economic concerns such as Brexit and U.S.-China trade tensions, JPMorgan’s Dimon said the U.S. economy “continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong.”
(Reporting by Matt Scuffham; Editing by Neal Templin and Meredith Mazzilli)
U.S. and European Union flags are pictured during the visit of Vice President Mike Pence to the European Commission headquarters in Brussels, Belgium February 20, 2017. REUTERS/Francois Lenoir
April 12, 2019
By Philip Blenkinsop
BRUSSELS (Reuters) – The European Commission has drawn up a list of U.S. imports worth around 20 billion euros ($22.6 billion) that it could hit with tariffs over a transatlantic aircraft subsidy dispute, EU diplomats said.
U.S. President Donald Trump on Tuesday threatened to impose tariffs on $11 billion worth of European Union products over what Washington sees as unfair subsidies given to European planemaker Airbus.
The EU measures would relate to the EU’s World Trade Organization complaint over subsidies to Boeing.
WTO arbitrators have yet to set final amounts of potential countermeasures in each case.
The Commission said earlier this week that it had begun preparatory work on countermeasures in the Boeing case.
It added then that it was open for discussions with the U.S., provided these were without preconditions and aimed at achieving a fair outcome.
EU diplomats said the Commission was expected to publish a list of products on April 17 and begin a process of public consultation, after which the list could then be adjusted.
The final amount decided by the WTO arbitrator could also be lower. The EU had also initially requested that the WTO authorize countermeasures of $12 billion. The arbitrator’s decision may not come before March 2020.
The U.S. and Europe have been locked in dispute over mutual claims of illegal aid to their respective plane giants. The case has been grinding through the WTO for almost 15 years, yielding partial victories for both sides.
(Reporting by Philip Blenkinsop; editing by Robin Emmott and Mike Harrison)
FILE PHOTO: Pedestrians are reflected on an electronic board showing stock prices outside a brokerage in Tokyo, Japan December 27, 2018. REUTERS/Kim Kyung-Hoon
April 12, 2019
By Herbert Lash
NEW YORK (Reuters) – Global stock markets rose on Friday after JP Morgan’s results kicked off the U.S. corporate earnings season in style, while signs of stabilization in China’s economy also helped riskier assets on views the growth outlook worldwide is better than thought.
Chinese data showed exports rebounded last month, driving U.S. and euro zone bond yields to three-week highs and helping offset weaker imports and reports of another cut in German growth forecasts.
Investors are looking for signs of a Chinese economic recovery to temper global growth worries, especially after the International Monetary Fund this week downgraded its 2019 world economic outlook for the third time.
China’s trade results, as well as credit data, have helped boost risk appetite and reinforce the stabilization thesis, which should have spill-over effects for the global economy, said Candice Bangsund, a portfolio manager with the global asset allocation team at Fiera Capital in Montreal.
“The whole China situation really appears to be gaining some ground,” Bangsund said. “We saw a very impressive rebound in exports, this of course is helping alleviate fears of a hard landing.”
MSCI’s gauge of equity market performance in 47 countries gained 0.37%, while the EURO STOXX 50 index rose 0.31%.
On Wall Street, the Dow Jones Industrial Average rose 186.88 points, or 0.71%, to 26,329.93. The S&P 500 gained 12.47 points, or 0.43%, to 2,900.79 and the Nasdaq Composite added 19.07 points, or 0.24%, to 7,966.43
The euro gained despite the German growth concerns. Dealers were gearing up for demand from Japan as Mitsubishi UFJ Financial closed in on its multi-billion-euro acquisition of DZ Bank’s aviation-finance business.
The dollar index fell 0.37%, with the euro up 0.56% to $1.1313. The Japanese yen weakened 0.28% versus the greenback at 111.99 per dollar.7
Euro zone and U.S. government debt yields rose after the rebound in Chinese exports.
Yields on Germany’s 10-year government bond crossed into positive territory, to 0.054%.
Benchmark 10-year U.S. Treasury notes fell 13/32 in price to push up their yield to 2.5507%.
CRUDE OIL’S BIG 2019 START
Oil provided the big milestones. Brent was at $71.4 a barrel, having broken back through the $70 threshold this week, and U.S. WTI was heading for a sixth straight week of gains for the first time since early 2016.
Involuntary supply cuts in Venezuela, Libya and Iran have supported perceptions of a tightening market, already constrained by production cuts from OPEC and its allies.
Brent crude oil futures rose 64 cents to $71.47 a barrel while West Texas Intermediate crude futures, the U.S. benchmark, added 64 to $64.22.
Commodities have had the best first-quarter start ever, Bank of America Merrill Lynch analysts said, calling the annualized returns they are tracking the strongest in the past 100 years.
Taking advantage of strong prices and subdued valuations for oil producers, Chevron said it will buy Anadarko Petroleum Corp for $33 billion in cash and stock.
Gold steadied en route to its first weekly gain in three weeks as the dollar weakened, although the metal’s advances were capped by stronger equities.
Gold crept higher after falling more than 1 percent on Thursday to break below $1,300 following solid U.S. data. Spot gold traded at $1,292.41 per ounce.
For a graphic on Falling volatility, see – https://tmsnrt.rs/2X40O8U
(Reporting by Herbert Lash; Editing by Dan Grebler)