Tech stocks' lead declines as banks head into earnings season

Stocks were sluggish on Friday as tech companies lost their winning streak and looked to big banks' results for inspiration as earnings season gets underway.

The tech-heavy Nasdaq Composite Index (^IXIC) fell 0.9%, and the S&P 500 (^GSPC) fell 0.7%. The Dow Jones Industrial Average (^DJI) fell 0.6%, or more than 200 points.

After leading the rally on Thursday with the Magnificent 7 technology stocks, stocks are once again falling, driven by AI tailwinds. Investors were also relieved that wholesale inflation growth was weaker than expected, after being spooked by an unexpected jump in consumer prices.

Investors are scrutinizing the quarterly results of Wall Street's biggest banks to assess the potential impact if interest rates are higher than expected this year.

BlackRock's (BLK) results kicked off earnings season before the bell on Friday, raising hopes that the company's latest information will revive the stock's gains from the start of the year. Shares in the world's largest asset manager traded in the red after the company posted a 36% profit increase, netting pre-market gains.

JPMorgan (JPM) stock falls after profits beat target as CEO Jamie Dimon cited “inflationary pressures” and Federal Reserve policy as concerns did. Wells Fargo (WFC) and Citigroup (C) rose following the report.

Meanwhile, precious metals continued to perform well, with gold (GC=F) setting a new record above $2,400 and silver (SI=F) trading at its highest since early 2021. Despite tensions in the East, they are avoiding U.S. Treasuries in the face of inflation concerns.

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Friday, April 12, 2024 6:37 a.m. (Pacific Daylight Time)

Stock prices plummet as banks enter earnings season

Stocks fell on Friday as tech names lost momentum and investors braced for the first wave of earnings season following earnings releases from big banks.

The tech-heavy Nasdaq Composite Index (^IXIC) fell 0.9%, and the S&P 500 (^GSPC) fell 0.7%. The Dow Jones Industrial Average (^DJI) fell 0.6%, or more than 200 points.
Friday, April 12, 2024 5:23 a.m. (Pacific Daylight Time)

Jamie Dimon makes a point about interest rates to Yahoo Finance

A fun call between JP Morgan (JPM) CEO Jamie Dimon, CFO Jeremy Burnham, and reporters.

The topic of discussion was, of course, profits, but Dimon's views on interest rates and the economy were also a hot topic.

Mr. Dimon gave me a good point regarding pricing. (I asked Burnham about how the company is preparing for a “prolonged period of high interest rates.”)

“I just want to point out that it's not so important that interest rates are high in and of itself. What matters is why – is it because of stagflation? That's obviously negative. Or is it because of healthy growth? Is it actually because of stagflation? That's pretty good.''

Dimon went on to say that he is not “predicting” a recession.
Friday, April 12, 2024 4:43 a.m. (Pacific Daylight Time)

Early trend indications from bank profits: Investment Banking

This morning, one sector immediately jumped out from the earnings calls of JPMorgan (JPM) and Wells Fargo (WFC).

Investment banking.

JPMorgan's investment banking division's revenue increased 27% year-on-year due to an increase in bond and stock underwriting commissions.

Wells Fargo's investment banking revenue increased 69% from the same period last year.

Is this a sign of more M&A and IPOs this year? Let's start the discussion.
Friday, April 12, 2024 3:14 a.m. (Pacific Daylight Time)

It's hard to make a fuss about BlackRock's earnings

You should always be very critical of earnings reports and financial statements. Question everything, both good and bad.

That being said, I'm having a hard time putting a damper on these results for BlackRock (BLK) this morning. In its simplest form, here is a huge asset management company that increased its assets under management (AUM) by $1.4 trillion year over year to $10.5 trillion. At the same time, the company monitored its expenses more closely, resulting in an improvement in operating margin of 180 basis points year over year.

Considering BlackRock's size, it doesn't get much better.

It's no surprise that the stock is up nearly 2% pre-market.
Friday, April 12, 2024 3:01 a.m. (Pacific Daylight Time)
Inside the Apple industry

The Apple (AAPL) ticker is back on Yahoo Finance's “Trending Ticker” page to end the week.

Shares soared on Thursday following reports that the company is revamping its Mac product line with new AI-enabled chips. While this seems like good news, it may only embolden bulls who want to reinvigorate the tech giant's stock, which has fallen 9% since the beginning of the year.

The lagging share price reflects multiple reasons, and JPMorgan analyst Samik Chatterjee explains them well in a new client note.

Chatterjee said iPhone sales data “highlights headwinds,” including in China. There are also concerns about the downside risk of Apple's services business amid “intensified regulatory scrutiny in multiple regions.”

But Chatterjee argues that these concerns are now largely baked into the stock price.

He says investors are starting to warm to Apple.

The company's stock's valuation premium to the broader market has eased and is now at the lower end of the multiple the stock has traded at recently since the launch of the iPhone 12.

Apple is seeing “increasing investor interest” in the stock market during the “AI upgrade cycle.”