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U.S. futures fall on tech stocks as banks head into earnings season

Max SmithBy No Comments4 Mins Read


U.S. stock futures were stumbled on Friday as tech companies lost their winning streak and investors looked for inspiration in a flurry of big bank results to open earnings season.

Futures for the tech-heavy Nasdaq 100 Index (^NDX) fell 0.5%, and futures for the S&P 500 Index (^GSPC) fell 0.4%. Contracts on the Dow Jones Industrial Average (^DJI) fell 0.3%.

After led by the Magnificent 7 technology companies on Thursday, stocks are once again buoyed 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.

BlackRock (BLK)'s results kicked off earnings season early 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 soared pre-market after posting a 36% rise in profits.

Investors are watching to see how big banks benefit if interest rates remain higher than expected this year. JPMorgan (JPM) reported higher profits due to higher interest income, while Wells Fargo (WFC) reported lower profits due to lower interest income.

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, investors are avoiding US bonds due to concerns about inflation.

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  • 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.

  • 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.

  • 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.”



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