LGT Navigator

Solid start to the earnings season

The major Wall Street houses kicked off the quarterly corporate reporting season on Friday. Investors were eagerly awaiting to see whether the recent turbulence surrounding US regional banks such as Silicon Valley Bank had left its mark on the balance sheets of the major investment houses. Although US banks were able to convince with their figures for the first quarter, the mood on the stock market remains tense.

Alessandro Fezzi, LGT
Reading time
5 minutes
US banks
© Shutterstock

First and foremost, the quarterly results of the banks were better than expected. However, a cautious look at the next quarters reveals that negative effects are expected due to the banking crisis. The banks were able to profit from the sharp rise in interest rates, and J.P. Morgan earned USD 12.6 billion in the first quarter, 52% more than in the previous year. With the quarterly figures, the largest US bank was able to clearly exceed expectations. Rival Citigroup reported a net profit of 4.6 billion US dollars for the first quarter, compared with 4.3 billion in the same period last year. A similar picture was seen at Wells Fargo. The San Francisco-based bank reported a 32% increase in profits to 5 billion US dollars. This week will continue to focus on the first quarter balance sheets and outlooks for the coming months of US blue chip companies. Some highlights include Bank of America, Goldman Sachs, Johnson & Johnson and Netflix on Tuesday. Morgan Stanley, IBM and Tesla on Wednesday. AT&T and American Express on Thursday. Overall, the mood on the trading floor, thanks to the weakening of inflation and interest rate concerns, brightened towards the weekend. 

On Wall Street, business results from US banks were not enough to close the week on a positive note. The Dow Jones Industrial closed 0.42% lower at 33,886.47 points but posted a gain of 1.2% for the week. The broad-based S&P 500 fell by 0.21% to 4,137.64 points and on the technology-heavy Nasdaq 100 indices fell by about 0.3%. Meanwhile, the yield on ten-year US government bonds rose to 3.51%. 

New economic data from the US showed a mixed picture. On the one hand, retail sales fell more than expected in March. On a monthly basis, retail sales fell by 1.0%, whereas analysts had expected on average only half as strong a decline. On the other hand, consumer sentiment brightened last month according to survey results from the University of Michigan. The consumer confidence barometer improved from 62.0 points in February to 63.5 points. 

On stock exchanges in the Asia-Pacific region, most stock indices rose at the start of the week. The Hang Seng Index in Hong Kong rose by 0.22%. Mainland Chinese markets advanced, with the Shanghai Composite up 0.8% and the Shenzhen Component up 0.1%. In Tokyo, however, the Nikkei 225 declined slightly. 

Corporate news in focus: State Street with Q1 figures.

Economic data in focus: Italy consumer prices March (10:00 CET). From the US, the Empire State Industrial Indicator for April (14:30) and the NAHB Housing Market Index for April (16:00).

LGT helps you make informed investment decisions

All about global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi,
Source: LGT Bank (Switzerland) Ltd.

Contact us