Eurozone Sovereign Yields below Zero – US Treasuries Back in Vogue (Part 1 of 3)
US banks to kick off earnings season on April 14
On Tuesday, April 14 the earnings season will start for major banks in the US. JPMorgan Chase (JPM) and Wells Fargo (WFC) are set to release their first quarter earnings report on Wall Street. JPMorgan was up 0.60% while Wells Fargo gained 0.50%. The Financial Select Sector SPDR ETF (XLF) also gained about 0.37%. Other banks including Bank of America (BAC), Goldman Sachs (GS), and Citigroup (C) are also due to release their first quarter earnings this week.
US banks among the first to fall to the currency wars
From the banking sector earnings report, investors will watch for the impact of the ongoing currency volatility on these firms’ cash flows and margins. Read US Banks Among the First to Fall to the Currency Wars for deeper insight into the topic. JPMorgan, Bank of America, and Goldman Sachs earn about 26%, 13%, 42% of their revenue, respectively, from foreign sources.
The Dollar Index was up 0.18%. The stronger dollar has been hurting profits for US multinationals—many have also been hurt by the oil price plunge since last year. Losses due to the oil price plunge are expected to weigh heavy on the energy sector (XLE) companies’ results.
Proposed GE Capital divestiture weighs down SPY and DIA
The broad-market SPDR S&P 500 ETF (SPY) was down 0.45% and the SPDR Dow Jones Industrial Average ETF (DIA) shed 0.40%. Both of these ETFs were weighed down by the divesture news from the industrial conglomerate General Electric (GE). The Industrial Select Sector SPDR ETF (XLI) was down 0.95%. The multinational corporation announced plans to divest the majority of its capital arm—GE Capital. The company’s stock dipped 3.09%. General Electric is also scheduled to report earnings this week.
Symantec (SYMC)—a security software company—was the worst performer on April 13. It shed 5.65% on the news that the company is considering selling its Veritas Software division. Meanwhile, Netflix’s (NFLX)—a video-on-demand company—stock surged to an all-time high of $474.68—up 4.42% on April 13—as the company seeks stakeholder approval to a proposed stock split.
With the start of the earnings season, US equities will see more volatility based on expectations differing from companies’ actual earnings reports.
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