Home » Wall Street cautiously awaits Powell after inflation is given. Focus on Goldman, JPMorgan and Pepsi post balance sheets. Sell ​​on Boeing (-3%) after the announcement

Wall Street cautiously awaits Powell after inflation is given. Focus on Goldman, JPMorgan and Pepsi post balance sheets. Sell ​​on Boeing (-3%) after the announcement

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Wall Street did not move, following the new records tested by all three major American stock indices. The Dow Jones lost 0.05% to around 34,977 points; the S&P dropped 0.13% to 4,379 points, while the Nasdaq lost 0.20% to 14,701 points.

On Wall Street yesterday, the Dow Jones Industrial Average closed 126.02 points higher at 34,996.18 points, a step away from the 35,000 point mark, while the S&P 500 rose 0.35% to 4,384.63. The Nasdaq Composite ended the Wall Street session advancing 0.21% to 14,733.24 points.

Today’s market movers are the publication of the US consumer price index, a thermometer of inflation in the United States, and the start of the quarterly earnings season (relative to the second quarter).

The inflation data confirmed the flare-up in prices, already announced with the numbers of recent months, fueling the fear of an overheating of the economy, therefore of a QE tapering by the Fed and a subsequent rate hike before the expected. The consumer price index flew in June by 5.4% on an annual basis, at the fastest pace in the last 13 years, well above the + 4.9% expected by the consensus and after the + 5% in May. Excluding the more volatile components of energy and food prices, the figure jumped by 4.5%, compared to the + 4% estimated by the consensus, after the + 3.8% in May and the record since September 1991.

The index also rose 0.9% on a monthly basis, compared to the expected + 0.5% and the previous + 0.6%. The core component, or the former prices of energy and food goods, also rose by 0.9% on a monthly basis, compared to the expected + 0.4% and + 0.7% in May.

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At this point, the new indications that will come from the head of the Federal Reserve, Jerome Powell, will be fundamental. Powell will speak in the US House and Senate tomorrow, July 14, and the day after tomorrow, July 15, on the occasion of his mid-year policy hearings at the US Congress.

A new wish to act against the overheating of the American economy came a few hours ago from James Bullard, president of the St. Louis Fed. “I think we are in a very good position to launch tapering,” Bullard said in an interview with the Wall Street Journal. “I am a bit worried that the Fed is fueling a real estate bubble”, added the banker, specifying however that he does not foresee “any rate hike until the end of 2022”.

Bullard is not currently a voting member of the FOMC – the monetary policy arm of the Federal Reserve – but he will be soon, starting next year.

The reaction of the Treasury market remains practically unfulfilled which, after rising to 1.37% after the release of the data, fell back to around 1.356%, compared to the 1.78% tested in March and the 1.58% they traveled to at the beginning of July.

The quarterly earnings season in the US has begun today, with the focus on banks’ balance sheets.

Prior to the start of the trading day, JP Morgan and Goldman Sachs released their balance sheets.

JP Morgan reported that it ended the second quarter of 2021 with net earnings worth $ 11.9 billion, or $ 3.78 per share, up $ 7.3 billion. The $ 3 billion release of reserves that had been set aside to meet any credit losses, or non-performing loans (NPLs) contributed to the sharp rise. Net sales fell 7% to $ 31.4 billion. Net interest income was $ 12.9 billion, down 8% year on year. Earnings per share, equal to $ 3.78, was higher than the $ 3.21 expected by the Refinitiv consensus, up + 132% on an annual basis.

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Focus on the financial statements, too, of Goldman Sachs. In detail, net income rose to 5.35 billion dollars, or 15.02 dollars per share, compared to 197 million, or 53 cents per share, a year ago. The consensus FactSet indicated earnings per share (EPS) of $ 10.25.

In the quarter under review, revenues rose by almost 16% to 15.39 billion, well above the consensus of 12.31 billion, but showed a decline of about 13% compared to the first three months of 2021. Goldman has he also made it known that he had revised up the quarterly dividend, bringing it to $ 2 per share against the previous $ 1.25 per share, with the new coupon to be paid on September 29th.

According to analysts, US banks, in general, will communicate quarterly reports that will highlight how, in the second quarter of 2021, they doubled their profits compared to the same period last year. In particular, the FactSet data indicate a growth rate of banks’ profits more than double, equal to + 119.5% on an annual basis, in the second quarter of the year.

JP Morgan and Goldman Sachs stocks are down.

Financial results of Bank of America, Citigroup and Wells Fargo are expected tomorrow, July 14; Morgan Stanley will release its budget on Thursday.

Among the former bank stocks, the protagonist of the Dow Jones is the aerospace giant Boeing, which was forced to revise the target for deliveries of its 787 Dreamliner aircraft which it has not yet delivered due to the discovery of some defects in some of its jets.

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Boeing has announced that it will ship less than half of the Dreamliners it has already produced but has not yet sold to customers, following the Federal Aviation Administration’s review. The stock suffers a decline of more than -3%.

PepsiCo stock did well, after the soft drink giant announced it ended Q2 with net income of $ 2.36 billion, or $ 1.70 per share, up from $ 1.65 billion, or $ 1.18 per share, same period last year. On an adjusted basis, earnings per share were $ 1.72, compared with an estimated $ 1.53. Revenue was $ 19.22 billion, up 20.5% year on year, and up from $ 17.96 billion expected.

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