US Stock Market Overview – Stocks Rally Led by New Economy Shares; Banks Earnings Slump

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Published: Apr 14, 2020, 20:00 UTC

Walmart shares hit fresh all-time highs

US Stock Market Overview – Stocks Rally Led by New Economy Shares; Banks Earnings Slump

US stocks moved higher on Tuesday led by gains in the Nasdaq. The markets appear to be bifurcating awarding the companies that are poised to benefit during the continued shelter in place order. Stocks like Amazon, Apple, Netflix, Microsoft and many of the chip stocks, surged higher on Tuesday. Amazon hit a fresh all-time high as investors piled into shares of a company that can deliver to anywhere in the world. Not far behind Amazon was the performance of Wal-Mart which also hit a fresh all-time high. Separately, earnings season kicked off with worse than expected financial results from some of the larger commercial banks. Roku and Johnson and Johnson reported better than expected earnings, due to demand for products as the coronavirus spread. Most sectors in the S&P 500 index were higher, led by consumer staples and cyclicals. Energy shares bucked the trend.

Bank Financial Results Kick of Earnings Season

JPMorgan and Wells Fargo set aside billions of dollars into reserves to prepare for customers to default on their loans as the coronavirus pandemic pummels the economy. JPMorgan and Wells Fargo are the first big US banks to report Q1 results, and act as a bellwether for the broader economy. Wells Fargo said it set aside an additional roughly $3 billion in the quarter for potentially bad loans, both in the consumer and commercial divisions. That raised its total provision to $3.83 billion.

JPMorgan reported profits of $2.87 billion, down 69% from $9.18 billion a year earlier. The bank earned $0.78 per share, missing the $2.16 forecast by analysts. Wells Fargo earned $653 million, down 89% from $5.86 billion a year earlier. The bank earned 1 cent per share, missing analyst expectations of 38 cents.

Trump Takes on Governors

President Trump said the power is his alone to determine the process of reopening the economy. The President said that the president of the United States, has the authority and calls the shots. The White House has so far declined to elaborate on or provide a legal explanation for Mr. Trump’s assertions. Meanwhile, several coalitions of state governments on the East and West Coasts have banded together to create their own regional reopening plans.

About the Author

David Beckerauthor

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.