“Hit and Miss” Earnings, Revenue Results From Goldman, Citigroup Weigh on U.S. Equity Markets

Goldman Sachs on Monday posted first-profit that beat the estimates, but company revenue failed to meet expectations. Citigroup reported mixed first-quarter results, saying its earnings were boosted by share buybacks while revenue fell amid a sharp decline in equities trading. Chicago Federal Reserve President Charles Evans told CNBC on Monday that he’d be comfortable leaving interest rates unchanged until fall 2020 to help ensure sustained inflation in the U.S.
James Hyerczyk
Sign of Wall Street with flags in the background

The major U.S. stock indexes are trading nearly flat shortly before the cash market opening. Mixed performances by Goldman Sachs and Citigroup failed to impress traders enough to extend last Friday’s strong rally.

The price action highlights warnings that this quarter’s earnings season may be the worst since 2016. Nonetheless, some discounted the news because of previous guidance. Furthermore, the earnings data is considered “stale” news and investors are primarily focused on global economic growth and a potential U.S.-China trade deal at this time.

Goldman, Citigroup Hit and Miss

Goldman Sachs on Monday posted first-profit that beat the estimates, but company revenue failed to meet expectations. The bank generated $2.25 billion of profit, or $5.71 a share, compared with the $4.89 estimate. Revenue dropped 13% to $8.81 billion, below analyst’s $8.9 billion estimate. Shares were down 1.7 percent in premarket trading.

Citigroup reported mixed first-quarter results, saying its earnings were boosted by share buybacks while revenue fell amid a sharp decline in equities trading. The bank repurchased $4.06 billion in shares in the first quarter and returned $1.08 billion to shareholders through dividends.

Investors Still Optimistic Over US-China Trade Talk Progress

Stocks remained underpinned by optimistic comments over the week-end by U.S. Treasury Secretary Steve Mnuchin. Mnuchin said he was hopeful trade talks with China would soon come to a close. He further added that a U.S.-China trade deal would go “way beyond” previous agreements between the two economic powerhouses, and that the two sides were “close to the final round” of negotiations, Reuters reported.

Fed’s Charles Evans Says Rates Can Stay Unchanged into Fall of 2020

Chicago Federal Reserve President Charles Evans told CNBC on Monday that he’d be comfortable leaving interest rates unchanged until fall 2020 to help ensure sustained inflation in the U.S.

“I can see the funds rate being flat and unchanged into the all of 2020. For me, that’s to help support the inflation outlook and make sure it’s sustainable,” Evans told CNBC’s Steve Liesman.

Empire State Manufacturing Index Rebounds, but Still ‘Fairly Subdued’

The New York Fed’s Empire State business conditions index rebounded to a reading of 10.1 from a nearly two-year low of 3.7 in March. Economists had predicted a reading of 10.

The New York Federal Reserve said that factory production in New York picked up a little in April but remained “fairly subdued.”

While the short-term picture improved, the index for future business conditions dropped 17 points to 12.4 in April, its lowest level in more than three years.

Additionally, the Empire State Index is averaging 6.6 this year, down from 19.8 in 2018.

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