Stock futures are pointing to a lower open as investors digest earnings reports from major banks; Bank of America, Wells Fargo, and Citigroup each released quarterly results this morning; Netflix is reportedly preparing to make its offer for Warner Bros. Discovery all-cash to speed up the transaction; gold and silver prices each set new record highs this morning; and investors will be keeping an eye on economic data releases and scheduled comments from several Federal Reserve officials. Here’s what you need to know today.
Stock Futures Slip as Investors Digest Bank Earnings
Stock futures are pointing to a lower open as quarterly earnings reports from major financial institutions roll in. Futures tied to the Dow Jones Industrial Average and S&P 500 were recently down 0.3% and 0.4%, respectively, while those linked to the tech-centric Nasdaq dropped 0.5%. Each of the major indexes closed lower on Tuesday—after two straight sessions of record highs for the Dow and S&P 500—as investors reacted to earnings from JPMorgan Chase (JPM) and Delta Air Lines (DAL), along with a slightly cooler-than-expected inflation reading for December. Gold futures were up 1% at $4,645 an ounce, once again trading at record highs. (more below) Crude oil futures were up 0.6% at $61.55 per barrel, at their highest level since October. Bitcoin was at $95,000, little changed from yesterday afternoon, while the yield on the 10-year Treasury note ticked lower to 4.16%.
Bank of America, Citigroup, Wells Fargo Report Results
The earnings reporting season is kicking into high gear with the release this morning of quarterly results from several big banks. Bank of America (BAC) and Citigroup (C) topped Wall Street expectations, while Wells Fargo (WFC) fell short of analysts’ estimates. “With consumers and businesses proving resilient, as well as the regulatory environment and tax and trade policies coming into sharper focus, we expect further economic growth in the year ahead,” Bank of America CEO Brian Moynihan said. All three stocks, and others in the banking sector, lost just over 1% on Tuesday after mixed results from JPMorgan dragged on the stocks. Financial stocks also had a rough start to the week, with several banks and credit card issuers sinking Monday after President Trump over the weekend said he would start pushing for a cap of 10% on credit card interest rates later this month. Shares of Bank of America and Wells Fargo were recently down about 2%, respectively, while Citigroup stock added 2%.
Netflix Considers Converting WBD Offer to All Cash, Reports Say
After reaching a $72 billion cash-and-stock deal to acquire Warner Bros. Discovery (WBD) last month, Netflix (NFLX) is now considering converting its offer to an all-cash takeover, Bloomberg reported Tuesday afternoon. The change would be designed to streamline the deal process and help it be completed faster, Bloomberg reported, as Netflix and Warner Bros. have faced pushback from politicians and Paramount Skydance (PSKY), which is reportedly set to launch a proxy fight over its takeover bid not being considered as much as the company thinks it should be. Paramount Skydance’s offer has been all cash from the beginning, with Oracle (ORCL) CEO Larry Ellison personally guaranteeing just over $40 billion of the deal’s financing. Warner Bros. has repeatedly told shareholders that the Netflix deal is superior, and that Paramount’s offer should be rejected. Netflix shares were up more than 1% ahead of Wednesday’s opening bell, while Paramount and Warner Bros. were little changed.
Gold and Silver Hit Fresh Record Highs
Gold and silver futures each hit record highs early Wednesday, extending rallies fueled recently by renewed concerns over the Federal Reserve’s independence and optimism that interest rates could be cut if inflation remains under control. Geopolitical and economic uncertainty helped drive gold and silver to a number of record highs last year. The U.S. military strike in Venezuela and news that the Department of Justice is investigating Fed Chair Jerome Powell have helped underpin the latest leg of the rally. Gold futures were up 1% at $4,645 an ounce recently, while silver futures surged more than 6% to around $92 an ounce.
Economic Data, Comments from Fed Officials in Focus
After Tuesday’s Consumer Price Index reading came in slightly lower than expected, investors get a new slate of economic data to evaluate on Wednesday. The Bureau of Labor Statistics released data for November on retail sales and wholesale inflation, reports that were delayed owing to the government shutdown in the fall. The retail sales numbers were slightly stronger than expected, while producer prices rose less than analysts anticipated. New home sales figures for the month of December will also be released, and several Federal Reserve officials are on the calendar at a number of economic conferences. Investors are following the economic data and the comments from Fed officials closely as they look for clues on whether more interest rate cuts are coming.
Do you have a news tip for Investopedia reporters? Please email us at
