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Results from the big banks are hitting the tape. JPMorgan earned $4.37 per share on revenue of $42.7 billion and Wells Fargo earned $1.42 a share on revenue of $20.37 billion.
The early reaction was that both bank stocks rose in premarket trade, though broader markets are still a bit weaker, with the S&P 500 contract down by 0.1%.
On Saturday it will be 2-years since the S&P 500 closed at its cycle low of 3,577.
Back then investors were worried that the sharp hike in interest rates needed to damp surging inflation would cause a sharp U.S. recession.
Ryan Detrick and colleagues at the Carson Group, turned bullish in November that year as they believed the U.S. economy would avoid a damaging contraction.
They were right, and the S&P 500 is now nearly 62% higher.
But the big question for investors is whether the bull can reach its third birthday. Detrick believes it should, and he presents a statistical nugget to support his claims.
To find out what this is, and much else besides, read Friday’s Need to Know column via the link below.
The early reaction wasn’t kind for Tesla, which on Thursday night unveiled a prototype of its robotaxi, which CEO Elon Musk says will be available before 2027.
Shares of Tesla — the tenth largest component of the S&P 500, and seventh biggest of the Nasdaq 100 — skidded 6% in premarket trade.
Reactions from analysts were just filtering in though they generally seemed to be on the positive side.
Dan Ives of Wedbush said the firm was maintaining its $300 price target and walked away “very positive around the Cybercab and autonomous path at Tesla.”
“Musk did a fantastic job of painting an ideal future for transportation that promises to both free up our time and increase safety,” added Jessica Caldwell, head of insights at Edmunds. “But many questions remain about how this will be achieved from a practical standpoint.”
One interesting reaction was in Uber Technologies, which soared 4%. “Overall, the event clarified Tesla’s vision and timeline for its Robo-Taxi, and we emerge incrementally positive on Uber shares as a result,” said analysts at Citi. It’s still possible that Tesla could partner with Uber for distribution in the future, the analysts said.
How are stock-index futures trading:
S&P 500 futures fell 6.75 points, or 0.12%
Dow Jones Industrial Average futures fell 35 points, or 0.08%
Nasdaq 100 futures fell 44 points, or 0.22%
On Thursday, the Dow Jones Industrial Average fell 58 points, or 0.14%, to 42,454, the S&P 500 declined 12 points, or 0.21%, to 5,780, and the Nasdaq Composite dropped 10 points, or 0.05%, to 18,282.
Stock futures were down very slightly on Friday morning as investors braced themselves for a fresh batch of producer price index (PPI) data and third-quarter earnings statements from Wells Fargo, BNY Mellon, Blackrock and JPMorgan Chase.
Tesla also was in the spotlight, falling in premarket trade after its robotaxi event.
Thursday saw the publication of both stronger-than-expected consumer price index data and worse-than-expected initial jobless claims in what saw markets increase bets the U.S. Federal Reserve will make a 25 basis point rate cut at its upcoming meeting in November.
Heightened tensions in the Middle East also helped lift Brent crude prices as Israel’s public broadcaster reported Netanyahu’s government will soon make a decision on when Israel will respond to Iran’s strikes last week.
Stocks, in turn, fell from record highs as U.S. equities were unable to hold onto recent gains in what saw almost 70% of the S&P 500 index stocks end Thursday lower. European markets showed similar but less dramatic declines.
Alongside the PPI data and bank earnings, investors will also be watching out for comments from Chicago Fed President Austan Goolsbee, Dallas Fed President Lorie Logan and Federal Reserve Governor Michelle Bowman.
