US stocks fall as weak sales results dent strong corporate earnings
The Dow Jones Industrial Average fell Friday, but notched a positive week, as investors assessed a weak retail sales report that dented enthusiasm around a stronger-than-expected start to corporate earnings.
Retail sales in March showed consumer spending fell twice as much as expected. Retail sales declined by 1 per cent last month, more than the 0.5 per cent drop expected by economists polled by Dow Jones, in part because consumers paid less for fuel.
The 30-stock Dow dropped 143.22 points, or about 0.42 per cent, to 33,886.47. The S&P 500 fell 0.21 per cent to 4,137.64. Meanwhile, the Nasdaq Composite slid 0.35 per cent to 12,123.47.
The Dow, however, notched its fourth-straight positive week, rising 1.2 per cent. The S&P 500 and the Nasdaq, meanwhile, nabbed their fourth positive week in five. The broad-market index added 0.79 per cent for the week, while the Nasdaq ticked higher by 0.29 per cent.
The disappointing retail sales data offset excitement around strong corporate earnings. JPMorgan Chase reported record revenue that beat analysts’ expectations, with the stock rising more than 7 per cent. Wells Fargo shares briefly rose as much as 2.1 per cent after the bank reported growing profits, before closing about flat. These were the first bank earnings since the collapse of Silicon Valley Bank and Signature Bank last month.
Meanwhile, Boeing closed lower by more than 5 per cent. On Thursday, the aircraft maker warned of delivery delays for some of its 737 Max planes.
Expectations for this earnings season are downbeat. Analysts polled expect S&P 500 earnings fell more than 5 per cent in the first quarter. Ten S&P 500 companies released results last week, 60 are due to release their figures this week. All eyes will be on future guidance.
And if you’ve been in the city recently watching people queue outside luxury brand stores – French luxury group LVMH, has investors cheering bumper quarterly results and pushing CEO ‘s Bernard Arnault net worth to $210 billion.
Arnault has turned LVMH into Europe’s most valuable public company. The market capitalisation of the group, whose brands include Louis Vuitton and Tiffany, has more than doubled in the last four years despite severe headwinds, to close in on the $500 billion club. That’s allowed it to surpass the oil giant Exxon Mobil and the banking behemoth JP Morgan Chase.
Across the sectors Financials was the best performer, whilst Real Estate was the biggest laggard.
Futures
The SPI futures are pointing to a 0.2 per cent gain.
Currency
One Australian dollar at 7:10 AM is buying 67.05 US cents..
Commodities
Iron ore futures are pointing to a 1.8 per cent fall.
Gold dropped 1.92 per cent. Silver fell 1.79 per cent. Copper lost 0.35 per cent and oil added 0.44 per cent.
Figures around the globe
Across the Atlantic, European markets closed higher. London’s FTSE gained 0.4 per cent, Frankfurt added 0.5 per cent while Paris closed 0.5 per cent higher.
In Asian markets, Tokyo’s Nikkei added 1.2 per cent, Hong Kong’s Hang Seng rose 0.46 per cent and China’s Shanghai Composite closed 0.6 per cent higher.
On Friday, the Australian sharemarket closed 0.5 per cent higher at 7362.
Ex-dividends
New Hope Corporation (ASX:NHC) is paying 40 cents fully franked
WAM Alternative (ASX:WMA) is paying 2.5 cents fully franked
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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