Bank reporting season to provide further market volatility

 

The S&P 500 ticked slightly higher Monday as investors looked ahead to key inflation data this week.

The broader index rose 0.1 per cent to 4,109.11. The Dow Jones Industrial Average added 101.23 points, or 0.3 per cent, to 33,586.52. Meanwhile, the Nasdaq Composite inched lower by 0.03 per cent to close at 12,084.36.

Tech stocks struggled overnight, with shares of Apple falling 1.6 per cent and Google-parent Alphabet sliding 1.8 per cent. Tesla shares fell 0.3 per cent after the company said it will cut prices again on some electric vehicles. Meanwhile, shares of chipmakers rose after Samsung said it would cut production to support prices; Micron Technology shares gained 8 per cent.

Investors are coming off a long holiday weekend and responding to the March jobs report that came out on Good Friday when the New York Stock Exchange was closed. The report showed a resilient economy and moderate inflation, following some signs of weakening in the labor market earlier in the week.

Nonfarm payrolls grew by 236,000 for the month, about in line with the Dow Jones estimate of 238,000, the Labor Department reported. The unemployment rate fell to 3.5 per cent, against expectations that it would hold from the previous month at 3.6 per cent.

Looking ahead, investors are in for a busy week of economic data, including the latest consumer price and producer price index data for March – due out Wednesday and Thursday, respectively – which help determine if or when the Fed will pause or end its rate-hiking campaign.

They’ll also get the first batch of companies reporting first-quarter financial results. With the major banks – JPMorgan Chase, Wells Fargo and Citigroup – reporting on Friday.

Jamie Dimon discussed the banking crisis recently in an interview with CNN, the JPMorgan Chase CEO. said turmoil caused by the collapse of Silicon Valley Bank and Signature Bank would make a recession more likely.

Investors are loading up on option protection against a fresh round of financial turmoil in US regional bank stocks as lenders prepare to reveal how badly their earnings have been squeezed by the troubles that took down Silicon Valley Bank.

Analysts at Morgan Stanley recently cut earnings estimates for regional banks by 20 per cent this year and nearly 30 per cent for 2024.

Overall, overnight, S&P500 sectors were mixed. Industrials was the standout, whilst communication services was the biggest laggard.
 
Currency

One Australian dollar at 7:20 AM is buying 66.39 US cents..

Commodities

Iron ore futures are pointing to a 0.8 per cent loss.

Gold lost 0.98 per cent. Silver fell 0.33 per cent. Copper lost 0.67 per cent and oil fell 0.98 per cent.

Figures around the globe

In Asian markets, Tokyo’s Nikkei added 0.4 per cent while Hong Kong’s Hang Seng was closed and China’s Shanghai Composite closed 0.4 per cent lower.

On Thursday, the Australian sharemarket closed 0.3 per cent lower at 7219.

Ex-dividends

Cosol (ASX:COS) is paying 1 cent fully franked
Future Generation Global Invstmnt Co (ASX:FGG) is paying 3.5 cents fully franked
Seven Group Holdings (ASX:SVW) is paying 23 cents fully franked
WAM Active (ASX:WAA) is paying 3 cents fully franked
WAM Research (ASX:WAX) is paying 5 cents fully franked

Dividends payable

Chorus (ASX:CNU)
DDH1 (ASX:DDH)
Downer EDI (ASX:DOW)
Humm Group (ASX:HUM)
Kina Securities (ASX:KSL)
Link Administration Holdings (ASX:LNK)
Saunders International (ASX:SND)
Southern Cross Media Group (ASX:SXL)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

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