The three major US equity indices closed near the flatline on Tuesday as investors weighed the latest earnings releases while Fed tightening concerns remained.  The Dow and Nasdaq Composite shed 0.03% and 0.04%, respectively, while the S&P 500 rose 0.09%.  In Europe, equity markets registered more tangible gains, with the Euro Stoxx 50 up 0.60%, supported by banks and mining companies. 

Summary as at 19.04.2023 

  • Most Asian equity markets fell this morning as uncertainty over the path of US monetary policy largely outweighed optimism over an economic recovery in China, with the focus now turning to a slew of indicators from the Federal Reserve this week.  The Nikkei 225, Hang Seng and Shanghai Composite declined, while the S&P/ASX 200 and Kospi rose. 
  • European shares are headed for a flat open this morning while US futures are seen inching lower as investors continue to focus on the earnings season and the Fed’s policy path. 
  • Oil drifted lower on Wednesday as the market weighed potential interest rate hikes from the Federal Reserve that could slow growth and dampen oil consumption, offsetting falling US inventories and strong Chinese economic data. 
  • Federal Reserve Bank of St. Louis President James Bullard yesterday was among the latest policymakers to favour continued interest-rate hikes to tame inflation.  His Atlanta counterpart Raphael Bostic anticipates one more 25 basis point hike, followed by a hold at that level for quite some time. 
  • Bank of America reported yesterday that profit for the first quarter rose 15% from a year earlier to 94 cents a share, surpassing the 81 cents analysts were expecting.  Revenue rose 13% to $26.3 billion, thanks to strong net-interest income.  Its shares were up about 0.6%. 
  • Goldman Sachs also reported earnings that beat Wall Street’s projections but its $12.22 billion revenue fell short of the $12.79 billion expected.  Investment banking fees were down 26% from a year earlier, which may have contributed to the revenue miss.  This is potentially an issue for all the big banks, reflecting what Goldman Sachs called “a significant decline in industry-wide completed mergers and acquisitions transactions and debt underwriting.”  Its shares were down about 1.7%. 
  • Johnson & Johnson reported a better-than-expected 5% rise in revenue and EPS of $2.68, beating analysts’ expectations by about 18 cents.  US sales grew a solid 10% but international sales growth of just 2% might have been crimped by a strong US dollar.  Sales in the company’s pharmaceutical business grew 4% in the first quarter.  
  • Following yesterday’s market close, Netflix reported first-quarter revenue and guidance that fell short of Wall Street projections just as many were expecting the company to benefit from the launch of its ad-supported tier and a crackdown on password sharing.  Shares fell more than 8% in after-hours trading following the report.