JPMorgan Chase (JPM) kicked off the first set of earnings reports by posting an unexpected increase in profit over last year, driven by a near-30% jump in markets revenue after a stock rally earlier this year and jump in volume drove more equity and bond trading activity. Its provisions for credit costs totaled a smaller than expected $611 million, versus the more than $2 billion in reserve Wall Street had expected the bank would set aside in anticipation of soured loans during the pandemic.
On the whole, consensus economists expect companies within the S&P 500 financials sector will see earnings per share decline, in aggregate, by 19.4% over last year. Still, this estimate – along with the broader estimate for S&P 500 earnings to decline by 20.5% in the third-quarter – has been upgraded since the start of the summer, as analysts mulled a less dire outlook for economic activity since the spring.
“The increase in analysts’ earnings estimates reflects increased confidence in the outlook, even with the challenges Covid-19 still presents in terms of social distancing, various safety protocols, and shifting consumer behavior,” LPL Research analysts Jeffrey Buchbinder and Ryan Detrick said in a note Monday. “We have been encouraged by recent data pointing to a continued steady reopening of the economy, and we believe the likelihood that additional lockdowns may meaningfully impair business activity remains very low.”
“We believe the chances are good that the technology sector and the digital media and e-commerce internet industry groups will produce earnings growth in the third quarter,” they added. “As long as those winners keep winning, and we think they will, they provide a solid earnings foundation for the broad market.”
Shares of Apple gave back some gains following a more than 6% surge during Monday’s regular session, as Wall Street eyed the company’s new iPhone launch event Tuesday afternoon. As expected, the company announced the launch of the new iPhone 12, representing Apple’s first with 5G for faster connectivity, and featuring OLED screens and LIDAR sensors for augmented reality capabilities on some models.
Amazon, meanwhile, advanced further, after shares of the e-commerce giant closed 4.8% higher on Monday. Amazon Prime Day kicks off on Tuesday, with at least one firm anticipating that the event will bring in nearly $10 billion during the two-day sales bonanza alone.
4:03 p.m. ET: S&P 500, Dow end 4-day winning streak as bank stocks drop
Here were the main moves in markets as of 4:03 p.m. ET:
S&P 500 (^GSPC): -22.29 (-0.63%) to 3,511.93
Dow (^DJI): -157.71 (-0.55%) to 28,679.81
Nasdaq (^IXIC): -12.36 (-0.10%) to 11,863.90
Crude (CL=F): +$0.82 (+2.08%) to $40.25 a barrel
Gold (GC=F): -$31.20 (-1.62%) to $1,897.70 per ounce
10-year Treasury (^TNX): -5 bps to yield 0.7270%
2:35 p.m. ET: Eli Lilly pauses enrollment of participants in clinical trial for Covid-19 antibody treatment over safety concerns
Eli Lilly (LLY) on Tuesday became the latest drugmaker to temporarily halt a clinical trial for a Covid-19 therapy or vaccine due to a potential safety concern.
The company said it was pausing enrolling participants in a clinical trial for its antibody treatment at the recommendation of an independent data safety monitoring board.
The announcement, first reported by the New York Times, comes a day after Johnson & Johnson announced a temporary pause in the clinical trial of its Covid-19 vaccine candidate, also due to safety concerns after one participant became ill without explanation.
Shares of the company fell more than 3% in intraday trading.
12:20 p.m. ET: Nasdaq joins S&P 500, Dow in negative territory
The three major indices fell heading into Tuesday’s afternoon session, with the Nasdaq paring earlier gains to trade flat.
The Amazon-heavy consumer discretionary and tech-heavy communication services sectors outperformed, and were the only two sectors in the S&P 500 in positive territory. The financials sector was among the laggards alongside the energy and real estate sectors, despite better-than-expected results from JPMorgan Chase and Citigroup earlier in the day.
Here were the main moves in markets, as of 12:20 p.m. ET:
S&P 500 (^GSPC): -13.43 points (-0.37%) to 3,521.05
Dow (^DJI): -97.36 points (-0.34%) to 28,740.16
Nasdaq (^IXIC): flat at 11,876.45
Crude (CL=F): +$0.84 (+2.1%) to $40.27 a barrel
Gold (GC=F): -$31.70 (-1.64%) to $1,897.20 per ounce
10-year Treasury (^TNX): -4.1 bps to yield 0.734%
11:08 a.m. ET: Boeing loses more jet orders as air travel slump continues
Boeing (BA) on Tuesday reported a deepening decline in net plane orders this year, as commercial air travel remains heavily depressed due to the pandemic.
Boeing’s plane orders for the year to date have fallen on net by 983, updated data from the company showed on Tuesday. Cancelations accounted for 381 of the lost orders.
In the third quarter, Boeing delivered just 28 planes, after delivering 63 in the same period last year.
10:00 a.m. ET: Delta drops after company reports wider than expected loss, says it will delay aircraft purchase
Shares of Delta Air Lines (DAL) dropped more than 2% shortly after market open Tuesday, after the carrier delivered another massive quarterly loss and said it planned to push back billions of dollars worth of aircraft purchases over the next two years, underscoring the expected longer-term impact of the pandemic on airlines.
Delta’s quarterly net loss of $5.4 billion marked a massive swing into the red after the company posted profit of nearly $1.5 billion in the same period last year. During the entirety of the third quarter, cash burn averaged $24 million per day, but improved to an outflow of $18 million per day by September, the final month of the period.
Delta said it planned to put off $2 billion orders in 2020 and more than $5 billion until after 2022, with changes to the order book meant to “better match the timing of aircraft deliveries with network and financial needs over the next several years,” the company said, as commercial air travel demand remains low.
9:31 a.m. ET: S&P 500, Dow drop, giving back some gains after closing at six-week high on Monday
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): -2.93 points (-0.13%) to 3,529.61
Dow (^DJI): -100.18 points (-0.35%) to 28,737.34
Nasdaq (^IXIC): +7.54 points (+0.06%) to 11,888.47
Crude (CL=F): +$0.67 (+1.7%) to $40.10 a barrel
Gold (GC=F): -$22.60 (-1.17%) to $1,906.30 per ounce
10-year Treasury (^TNX): -3.6 bps to yield 0.739%
8:35 a.m. ET: Consumer prices post fourth straight monthly deceleration
Consumer prices rose at a decelerating rate for a fourth straight month in September, according to a Labor Department report Tuesday.
The department’s consumer price index (CPI) increased 0.2% in September over August, following a 0.4% monthly gain during the prior period. Excluding volatile food and energy prices, the CPI was also up 0.2% month on month. This core measure of consumer price changes increased 1.7% over last year, suggesting still-muted inflationary pressures in the US economy.
7:29 a.m. ET: Johnson & Johnson raises earnings guidance despite Covid-19 vaccine trial pause
Johnson & Johnson (JNJ) on Tuesday raised its profit outlook for a second time this year as demand for its cancer drugs and over-the-counter products like Tylenol served as an ongoing boost to results. The company now guides toward as much as $8.05 per share in full-year adjusted earnings, up from as much as $7.95 in its earlier outlook. Third-quarter sales of $21.08 billion were about $1 billion better than Wall Street expected, and adjusted earnings of $2.20 per share topped estimates for $1.99.
The rosier outlook, however, was not enough to fully offset some investors’ concerns, after the company said late Monday it had temporarily paused clinical trials of its Covid-19 vaccine candidate after one of its participants became ill without explanation.
7:33 a.m. ET Tuesday: Stock futures mixed with earnings under way
Here were the main moves in markets, as of 7:33 a.m. ET:
S&P 500 futures (ES=F): 3,530.25, down 2.5 points or 0.07%
Dow futures (YM=F): 28,690.00, down 108 points or 0.38%
Nasdaq futures (NQ=F): 12,216.00, up 117.75 points or 0.97%
Crude (CL=F): +$0.79 (+2.00%) to $40.22 a barrel
Gold (GC=F): -$4.10 (-0.21%) to $1,924.80 per ounce
10-year Treasury (^TNX): -1.3 bps to yield 0.762%
7:25 a.m. ET Tuesday: JPMorgan tops 3Q profit estimates, sets aside smaller than expected sum in credit reserves
JPMorgan Chase (JPM) reported third-quarter results that topped consensus expectations, with adjusted earnings per share coming in at $2.92 versus the $2.26 consensus analysts were anticipating, according to Bloomberg data. Revenue of $29.94 billion was ahead of the $28.39 billion consensus, as market revenue jumped 30% on strong stock and bond trading activity, and investment banking fees increased 9% over last year.
The company also had a smaller than expected provision for credit losses during the quarter, with this coming in at $611 million, and suggesting JPMorgan’s expectation for a smaller than expected quantity of customers defaulting on loans during the pandemic. Consensus analysts had expected reserves to total about $2.4 billion during the quarter, according to Bloomberg data.
6:05 p.m. ET Monday: Stock futures point to a higher open
Here were the main moves in equity markets, as of 6:05 p.m. ET:
S&P 500 futures (ES=F): 3,524.75, up 2 points or 0.06%
Dow futures (YM=F): 28,814.00, up 16 points or 0.06%
Nasdaq futures (NQ=F): 12,116.75, up 18.5 points or 0.15%