Stock Market Today: Dow Slides As Major Banks Report Profit, Dogecoin Soars

JPMorgan Chase

(ticker: JPM) reported earnings of $3.33 per share, ahead of estimates of $3.01 per share on revenue of $30.35 billion, ahead of expectations of $29.9 billion. The bank released $1.8 billion in loan loss reserves, without which the company would have missed earnings estimates. The stock fell 5.9% after rising 5.7% in the month leading to its gains.

Wells Fargo

(WFC) reported earnings of $1.38 per share, surpassing estimates of $1.13 per share on revenue of $20.9 billion, above expectations of $18.8 billion. The stock gained 3.3%. The stock rose 14.5% for the month leading up to the gains.

The company cited “soft demand” as one reason credit balances were lower. While the company did not address that in its results release, markets do not want higher interest rates to coincide with declining demand for loans.

Citigroep

(C) reported earnings of $1.46 per share, ahead of estimates of $1.38 per share, on revenue of $17 billion, above expectations of $16.8 billion. The bank’s borrowings totaled $668 billion, a 2.5% year-over-year decline.

Citi shares fell 2.5% after gaining 9% in the month that led to gains.

Markets also flipped through economic data Friday. Retail sales fell 1.9% month-on-month in December, missing expectations for a 0.1% decline and falling sharply from a 0.3% increase in November.

“While overall retail sales levels are high and remain strong, the December drop is likely to be impacted by consumers buying early, fearing well-publicized reports of supply shortages and delivery issues and retailers’ inability to deliver goods in time for Christmas. ” wrote Jamie Cox, managing partner of Harris Financial Group.

A sharp fall in retail spending seems very likely. According to 22VResearch, core retail spending was nearly $420 billion annually at the end of 2021. That’s almost 25% higher than the pre-Covid trend, so it’s slipping back down in recent months.

That’s not a pretty sight for equity investors, but markets will wait and see if the weak retail sales results will become a problem for broader economic growth or if it means consumers will start shifting spending from goods to services, whose results have been hit. by the pandemic.

“The retail sales volume has been ugly, we can’t help but notice it,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.

Industrial production fell 0.1% month on month in December, lower than forecast for a 0.3% increase.

The stock market is currently reflecting higher interest rates and less liquidity being injected into the markets by the Federal Reserve, which is now expected to raise interest rates three times this year and at some point shrink the size of its balance sheet to fight inflation.

The interest rate market now shows a 96% chance that the first hike will happen in March, up from 90% a few days ago. Economists at Citigroup wrote that the market expects three to four increases this year.

While interest rates have already risen across the board, the stock market may still reflect risk to economic growth. The S&P 500 is 3.8% below its all-time high, reached earlier this month.

The Fed’s recent shift to tighter monetary policy “frankly completes the most violently aggressive ‘over-face’ Fed policy I’ve seen in my career,” wrote Tom Essaye, founder of Sevens Report Research.

Unsurprisingly, value stocks, which are largely more economically sensitive, trailed growth and technology names on Friday. The financial sector is being hit hard – and the sector accounts for a large share of large-cap value stocks.

The

Financial Select Sector SPDR
Exchange-Traded Fund (XLF), which rose more than 4% through Thursday, fell 1.4% on Friday. That causes the

Vanguard S&P 500 Value
ETF (VOOV) is down 0.6% as financials are the largest sector in the fund, accounting for nearly a quarter of the fund’s total market value.

But it wasn’t just financial institutions that caused all the damage.

Without the gains in technology, the indices would be noticeably lower. The

Invesco S&P 500 Equal Weight
Exchange-Traded Fund (RSP), which weighs every stock in the index equally, fell 0.8%. That’s worse than the regular index, whose movements are heavily influenced by companies with higher market values.

Overseas, the pan-European

Stoxx 600
fell 1% and that of Hong Kong

Hang Seng Index
ended 0.2% lower.

In the field of commodities, crude oil prices continued to rise. West Texas Intermediate crude futures were up 1.2% to more than $83 a barrel.

Cryptocurrencies were generally lower.

Bitcoin
– the leading cryptocurrency – fell more than 3% in the past 24 hours to below $42,500, according to data from CoinDesk. smaller pear

Ether
fell 3% in tandem to about $3,250.

But

Dogecoin
-a “joke” token that has gotten a lot of attention from

Tesla

CEO Elon Musk and others—sleepked 14%; Tesla begins to accept the cryptocurrency for commodity payments.

Here are seven stocks in motion on Friday:

JUICE

(SAP) rose 1.7% after the German software group reported revenue from its cloud computing business grew 28% in the last quarter.

Novavax

(NVAX),

Modern

(MRNA) and

Pfizer

(PFE) fell 1.8%, 3.3% and 1.1% respectively after the Supreme Court blocked the Biden administration’s vaccine mandate for companies with 100 employees or more.

Boston Beer Co
.

(SAM) shares fell 9.5% after the company lowered its earnings outlook.

Las Vegas Sands

(LVS) jumped 13%; Shares in the casino giant have surged this week as some analysts see a brighter future for the stock in 2022 after a significant underperformance last year. Equal

Wynn Resorts

(WYNN), which faced similar pressures in 2021, including regulatory concerns from China, rose 6.7%.

Write to Jacob Sonenshine at [email protected] and Jack Denton at [email protected]