Bank earnings are expected to be muted, as traders wait for the Federal Reserve’s interest rate hike. A key metric that will dictate whether a bank reports favorably or poorly is Q4 net profit growth rates from various businesses.
The “stocks that are down right now” is a term used to describe stocks that are down in value. The stock market was muted ahead of bank earnings due to the volatility in the market.
As earnings season cranked up as investors anticipated new data on retail spending, Treasury rates jumped but stock futures were barely changed.
Futures for the S&P 500 ticked up less than 0.1% Friday. A decline in technology stocks dragged down major stock indexes Thursday. Contracts for the tech-focused Nasdaq-100 were flat and futures for the Dow Jones Industrial Average added 0.1% Friday.
BlackRock, Citigroup, JPMorgan Chase, and Wells Fargo are all expected to report earnings before the market opens. Money managers will be seeking for information on how the Omicron variant and rising inflation are affecting firms. Some investors believe that expected interest rate rises would boost financials profitability and make the industry more appealing than tech.
Some investors have sold government bonds in anticipation of a rate hike as soon as March, causing yields to increase and prices to fall. The 10-year Treasury note yield rose to 1.729 percent on Friday, up from 1.708 percent the day before. Investors are exiting technology equities that did well in a low-yielding environment due to rising rates.
Last year, the value of the US dollar increased to its highest level since 2015. This is beneficial for many American consumers, but it might hurt equities and the economy in the United States. Dion Rabouin of the Wall Street Journal explains. Sebastian Vega/WSJ photo illustration
Hugh Gimber, a strategist at J.P. Morgan Asset Management, stated, “Equity markets will continue to take their signals from the bond market.” “What’s becoming evident is that the Fed is discovering that inflationary pressures are more and more widespread than previously thought.”
Investors are attempting to predict how increasing inflation, a tight job market, and rising wages would affect the Federal Reserve’s rate-hiking path. On Thursday, Lael Brainard, the White House choice for the Federal Reserve’s No. 2 official, told Congress that lowering inflation was the Fed’s “most critical objective.”
At 8:30 a.m. ET, new statistics on retail sales, internet sales, and restaurant sales for December will be released.
The cryptocurrency dogecoin rose 14 percent from its 5 p.m. ET level on Thursday after Tesla CEO Elon Musk stated the money, which was created as a joke, will be accepted as payment for select products.
Investors are exiting technology companies because of rising rates.
Courtney Crow/Associated Press photo
Brent crude futures, the global benchmark, climbed 0.8 percent to $85.16 a barrel.
Overseas, the Stoxx Europe 600 index dropped 0.7 percent. EDF shares fell 22% in Paris trade after the state-controlled utility lowered its nuclear-output forecasts and withdrew its profit guide for the year.
Asia’s major market indices ended the day down. The Shanghai Composite Index in China fell 1%, while the Kospi in South Korea fell 1.4 percent. The Nikkei 225 index in Japan lost 1.3 percent.
Caitlin Ostroff can be reached at [email protected]
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