Technologists are at the forefront as banks begin earnings season

Stocks tumbled as techs lost their winning ways on Friday, as investors looked for inspiration from big bank results to kick off the earnings season.

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

Stocks fell on Thursday after the “Magnificent 7” tech names gave way to renewed impetus from AI tailwinds. Investors took comfort from a lower-than-expected gain in headline inflation after being spooked by a surprisingly warm consumer price print.

Investors scrutinize the quarterly results of Wall Street's big banks to gauge the potential impact if interest rates are higher than expected this year.

BlackRock's ( BLK ) results kicked off the earnings season before the bell on Friday, amid hopes that corporate updates would renew the stock's early-year rally. Shares in the world's largest asset manager pared pre-market gains after the company posted a 36% jump in profit.

Shares of JPMorgan ( JPM ) fell after missing its profit targets as CEO Jamie Dimon raised concerns about “inflationary pressures” and Federal Reserve policy. Wells Fargo ( WFC ) and Citigroup ( C ) traded in the green after their reports.

Meanwhile, precious metals continued to shine: gold (GC=F) rallied above $2,400 to hit another fresh record, and silver (SI=F) traded at its highest since early 2021. Demand is thought to be driven by investors seeking safety amid moderate growth. Eastern tensions but shunning US government bonds in the face of inflation concerns.

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  • Oil prices will touch 2024 as tensions rise in the Middle East

    Oil futures rose as much as 3% on Friday on reports that Israel was preparing for an imminent attack from Iran on government targets on Saturday.

    West Texas Intermediate (CL=F) futures broke above $87 a barrel, while international benchmark Brent (BZ=F) touched a session above $92 a barrel.

    “The rise in tensions between Israel and Iran signals to traders that it could get worse before it gets better, and there seems to be a lot of options buying going into the weekend, putting upward pressure on futures prices,” Dennis said. Kiesler, senior vice president at BOK Financial, said in a note to clients on Friday.

    Crude prices have soared this year amid continued production cuts by oil bloc OPEC+ and tensions stemming from the Israel-Hamas war. Ukrainian drone strikes against Russian refineries also upended the future.

    WTI is up 21% year-to-date, while Brent is up roughly 20% over the same period.

  • Stocks fall as banks begin earnings season

    Stocks lost ground on Friday as tech names lost momentum and investors jumped ahead to the first wave of earnings and big bank results began to emerge.

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

  • Jamie Dimon makes a good point for Yahoo Finance on interest rates

    A fun call now with reporters and JPMorgan (JPM) CEO Jamie Dimon and CFO Jeremy Barnum.

    The topic, of course, is earnings, but also Dimon's views on rates and the economy.

    Dimon made a good point for me on rates. I asked Barnum about how the company is preparing for “longer high” interest rates:

    “I want to point out that the rates themselves are not so important. What matters is why – is it because of stagnation? It's obviously negative. Or is it because of healthy growth? It's actually very good.”

    Dimon said he “didn't predict” a recession.

  • Early Trend Call from Bank Earnings: Investment Banking

    A segment from JP Morgan ( JPM ) and Wells Fargo ( WFC ) bounced off the earnings posts this morning.

    Investment Bank.

    JP Morgan investment banking sales rose 27% from a year earlier, driven by higher loan and equity underwriting fees.

    Wells Fargo's investment banking revenue rose 69% year over year.

    Is this a sign of more M&A and IPOs to come this year? Let the discussion begin.

  • This BlackRock income is hard to cheat

    One should always be very critical about earnings report and earnings call. Question everything, good and bad.

    I'm having trouble throwing cold water on these results from BlackRock (BLK) this morning. In their simplest form, a giant asset manager grows assets under management (AUM) by $1.4 trillion annually to $10.5 trillion. At the same time, operating margins improved by 180 basis points from a year ago due to the company's increased focus on costs.

    Given Blackrock's size, it doesn't get much better than that.

    Shares are close to 2% premarket, well deserved.

  • Inside the Apple business

    Apple's (AAPL) ticker returns to the Yahoo Finance Trending Tickers page to close out the week.

    Shares took a hit Thursday on reports that the company is revamping its Mac line with new AI-enabled chips. That sounds like good news, and it could cheer bulls kicking the tires again on tech stocks after a 9% year-to-date drop.

    Stocks have lagged for a number of reasons, JPMorgan analyst Samik Chatterjee neatly presented in a new client note.

    Chatterjee said iPhone sales data “highlights headwinds”, including in China. There are also concerns about a downside risk to Apple's services business amid “increased regulatory scrutiny across multiple geographies.”

    But these concerns are now mostly baked into stock prices, Chatterjee argues.

    Investors are starting to like Apple, he says:

    • The stock's valuation premium to the broader market is moderate — the stock has traded at the lower end of multiples recently since the launch of the iPhone 12.

    • Apple has “increasing appetite from investors” as its “AI upgrade cycle” stock plays.

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