Stock futures rise as traders look at earnings

U.S. stock futures rose on Wednesday morning as investors watched a series of close earnings reports and further digested heated fears of inflation in the United States.

Contracts advanced on the S&P 500, ending a three-day losing streak. Dow and Nasdaq futures also gained in pre-market trading.

Investors on Wednesday received several quarterly reports from some major US companies and stock index components. These include Delta Airlines (DAL) and Pet, Path & Beyond (PPPY), as well as JPMorgan Chase (JPM), the largest US bank in terms of assets.

Jamie Dimon, CEO of JPMorgan Chase, gave a cautious and optimistic view of the US economy at the bank’s earnings release on Wednesday. Dimon noted that he was “optimistic about the economy, at least for a short time,” but “faces significant geopolitical and economic challenges due to high inflation, supply chain problems and the war in Ukraine.” The bank also built up its net reserves to $ 902 million, “largely due to the high probability of a negative risk,” Dimon said.

Meanwhile, Delta Air Lines, one of the leading airlines in the hub of resumption of business, suggested that despite first-quarter results showing another loss, business is set to grow further in the current quarter as the aircraft was previously caught up with the Omigran variation wave. Year. Returning to carrier profits in March, Delta noted that revenue is expected to reach 92% and 97% in the pre-epidemic stages for the current quarter ending in June.

These early earnings statements set the tone for what is expected to be a much lower quarter of revenue growth than in recent times. Many companies on Wall Street are expecting narrower margins than in recent quarters as sales have been strong amid rising consumer, raw material and transportation costs and a re-opening-fuel-loaded operation early last year. Prices. Overall, companies across the S&P 500 are expected to report year-on-year revenue growth of just 4.5%, which, according to FactSet, represents the slowest rate since the fourth quarter of 2020.

“This earnings season is becoming one of the most important earnings seasons because it gives you insight into which companies … have sustainable demand and which companies have that pricing,” said Kristen Bitterley, Citi’s Global Wealth Investment Chairman. Yahoo Finance said live on Tuesday.

“Even in decades like the 1970s, when we had high inflation, big cap quality US stocks were able to double their share price during that period,” he added. “So this is the pocket of the market, where we invest or invest with confidence.”

In fact, inflation has been a primary concern for investors, threatening to weigh more on both consumer wallets and corporate profits. The Bureau of Labor Statistics’s March Consumer Price Index (CPI) has been rising at the fastest rate since late 1981, rising 8.5% slightly faster than expected last year.

However, some economists suggested that the report was not all bad news, and showed some temporary signs of a peak in the rate of inflation.

“I think the CBI report has a little more good news than it seems on the surface … there are many things that indicate that we are starting to see the peak of inflation. That will change in the next few months,” said Tom Simmons, a fixed-income money market economist at Yahoo Finance Live on Tuesday. Said the place. “[It’s] It should be noted that the CPI, the reference period for March, was only after the Russian invasion of Ukraine. So really, it is capturing the most severe period of petrol price hike. In a few weeks we have already seen them start to soften a bit in the market. “

“Another thing is that the services are ex-energy – and if you remove the aircraft components – it was actually a little softer than the last few months,” he said. “Housing has actually gotten a little softer in the last few months, and the former energy products are getting a little softer. So, you know consumers have been able to cope better with the storm here. Inflation.”

7:20 am ET: Stock futures rise amid earnings

Here is where the stock traded on Wednesday morning:

  • S&P 500 Futures (ES = F): +26.5 points (+ 0.6%) 4,419.50

  • Dow Futures (YM = F): +172 points (+ 0.5%) to 34,311.00

  • Nasdaq Futures (NQ = F): +110.75 points (+ 0.79%) to 14,055.75

  • RawCL = F): + $ 1.45 (+ 1.44%) to $ 102.05 a barrel

  • Gold (GC = F): + $ 4.20 (+ 0.21%) to $ 1,980.30 per ounce

  • 10 year treasury (DNX): +0.6 bps to earn 2.733%

7:03 am ET: JP Morgan records mixed Q1 results as investment bank returns fall over last year

JPMorgan Chase released a mixed first-quarter results, topping overall Wall Street ratings, while some key businesses within the bank softened.

According to Bloomberg data, revised revenue fell 4.6% to $ 31.6 billion from $ 31.4 billion last year, exceeding consensus estimates. Fixed income and equity sales and business revenue both topped the expectations, while declining compared to last year, reaching about $ 5.7 billion and $ 3.1 billion, respectively. However, investment banking revenues, which were 28% higher and missed estimates, fell to a total of $ 2.06 billion as equity and debt write-offs fell earlier this year than in the past.

CEO Jamie Dimon noted that the banks’ core lending business was firm during the quarter.

“Lending strength continued to average up to 5% with fixed loans, while debt losses are still at historically low levels,” Dimon said in a revenue release.

6:50 am ET: Delta shares return to profit in March after lower-than-expected Q1 losses

Shares of Delta Airlines rose in the pre-market session.

According to Bloomberg data, adjusted losses were $ 1.23 per share for the March quarter or lower than the $ 1.26 per share expected by consensus analysts. Adjusted revenue was $ 8.2 billion and recovered 79% from the pre-epidemic comparable quarter of 2019. Capacity was restored by 83% compared to the pre-epidemic period, Delta added.

In the current quarter ending in June, Delta said capacity will increase again to 84% in the June 2019 quarter, with total revenues ranging from 93% to 97% in 2019.

“As demand increased due to the fading of Omigron, we returned to profit in March, producing almost a 10% solid adjusted operating range,” Delta CEO Ed Bastian said in the company’s earnings statement on Wednesday morning. “As our brand preference and demand picks up speed, we are successfully recovering higher fuel prices and paying our vision for a 12 to 14% adjusted operating range and strong free cash flow in the June quarter.”

6:10 pm and Tuesday: Stock futures are in the open

Here is where the markets will trade before the opening on Tuesday evening:

  • S&P 500 Futures (ES = F): +4.25 points (+ 0.1%) to 4,397.25

  • Dow Futures (YM = F): +33 points (+ 0.1%) 34,172.00

  • Nasdaq Futures (NQ = F): +17.75 points (+ 0.13%) to 13,962.75

New York, New York – April 12: Traders work on the floor of the New York Stock Exchange during afternoon trading on April 12, 2022 in New York City. Data released this morning is up 8.5 percent in March, the highest annual increase since December 1981, as energy prices soared due to Russia’s war in Ukraine. (Photo by Michael M. Santiago / Getty Images)

Emily McCormick is a Yahoo Finance correspondent. Follow her on Twitter.

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