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U.S. Stocks Fall on Bank Earnings; Crude Oil Drops: Markets Wrap


April 15, 2019

Bloomberg – U.S. stocks halted a three-day advance after disappointing results from Goldman Sachs Group Inc. and Citigroup Inc. dragged down bank shares. Crude slumped toward $63 a barrel in New York.

The S&P 500 Index dipped below 2,900, a level it surpassed last week for the first time in six months. Goldman slumped 3 percent for the biggest drop in the Dow Jones Industrial Average after missing estimates for sales and trading revenue. Citigroup also retreated after its revenue matched expectations. The Bloomberg Commodity Index slid as natural gas and crude futures retreated.

“The momentum is definitely in the US stock market, but the dramatic rise is looking a bit tired and in need of a few weeks break,” Paul Nolte, a portfolio manager at Kingsview Asset Management, wrote to clients. “Earnings season could provide the market with a bit of a rest as investors digest the reports and determine the overall strength of corporate America.”

The Stoxx Europe 600 Index traded in a tight range Monday, as losses in mining shares offset increases in media and insurance. The euro strengthened for a second day. In Asia, equities approached a fresh six-month high, propelled by markets in Japan and Korea, following the Bank of China’s release of upbeat credit data late Friday.

With Chinese trade and lending data showing signs of improvement for the world’s second-biggest economy, investors are turning to the U.S. earnings season to confirm the resilience of corporate America in the face of numerous challenges to growth. JPMorgan Chase & Co. posted strong first-quarter results last week, and Bank of America Corp. is up on Tuesday.

“You might say we’ve had this great bull recovery since the end of last year,” said Edmund Shing, global head of equity derivative strategy at BNP Paribas. “On the other hand, investors have not loaded up at all. That tells me this is somewhat fragile.’’

Central banks remain in the picture, with President Donald Trump renewing his attack on the Fed leadership over the weekend, saying the stock market would be “5,000 to 10,000” points higher had it not been for the actions of U.S. policy makers.

Elsewhere, West Texas oil contracts slipped after the longest run of weekly gains in three years as a report showed increased U.S. oil-rig activity. Emerging market stocks pared early gains, while still heading for the 12th increase in 13 sessions. In currencies, Korea’s won jump the most since January.

Here are some notable events coming up:

Earnings season rolls on this week, with reports due from: Bank of America, BlackRock, Morgan Stanley, American Express, Johnson & Johnson, Netflix, IBM, United Continental, PepsiCo, Honeywell, Alcoa and Taiwan Semiconductor. The Reserve Bank of Australia releases the minutes of its latest rate-decision meeting Tuesday. Wednesday brings China GDP, industrial production and retail sales data. Stock markets will be closed for Easter holidays in countries including the U.S., U.K. and Germany on Friday.

These are the main moves in markets:

Stocks

The S&P 500 fell 0.1 percent at 1:32 p.m. in New York. The Stoxx Europe 600 Index rose 0.1 percent. The MSCI Asia Pacific Index advanced 0.5 percent, the largest gain in more than a week. The MSCI Emerging Market Index advanced 0.1 percent. Topix index gained 1.4 percent with the first advance in more than a week.

Currencies

The Bloomberg Dollar Spot Index rose 0.1 percent. The euro climbed 0.1 percent to the strongest in more than three weeks. The MSCI Emerging Markets Currency Index advanced 0.1 percent to the highest in more than three weeks. The South Korean Won rose 0.6 percent.

Bonds

The yield on two-year Treasuries advanced one basis point to 2.40 percent, the highest in more than three weeks. The yield on 10-year Treasuries fell less than one basis point to 2.56 percent. Germany’s 10-year yield climbed two basis points to 0.07 percent, the highest in almost four weeks.

Commodities

Gold declined 0.4 percent to $1,285.03 an ounce, the weakest in more than 11 weeks. Brent crude fell 0.6 percent to $71.16 a barrel. Platinum dipped 1.6 percent to $884.40 an ounce, the lowest in more than a week on the largest decrease in more than two weeks.



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