Friday's Market Tear Sheet - Surprisingly Strong CitiBank Q2 Earnings Results Sent Stocks Soaring.
- C.Ashton
- Jul 15, 2022
- 3 min read
What is The Premarket Telling Us?
Friday, July 15, 2022.
US stock futures were up convincingly higher this morning's premarket indicating that stocks would open higher. Asian markets were mixed in their trading overnight. President Biden was on his first visit to the Middle East since becoming President. He was in Israel yesterday and visited Saudia Arabia today, where he is expected to meet with the notorious Saudi Crown Prince to press for an increase in oil production to help reign in soaring crude oil prices.
On The Bond Desk:
The US 10-Year Bond Yield @ 2.96%
Currency Desk:
Eurodollar: 1.008 (basically on par with the USD for the last few days as the Dollar has been strong)
UK Pound: 1.18
Crude Oil:
WTI crude oil futures at $98.39/barrel, up 2.72%.
On the Earnings Calendar:
JPMorgan and Morgan Stanley kicked off second-quarter earnings season yesterday before the opening bell. Both disappointed markets and traded lower in the session, weakening market sentiment.
Citibank and Wells Fargo reported second-quarter results this morning. The results were better than expected. CitiBank revenue was up 11% to $19.64 billion.
In M&A News:
None to report
What About The Asian And European Markets?
Major Asian markets ended mixed Japan (Nikkei 225) up 0.54%, Shanghai down 1.64%, Hong Kong (Hang Seng) down 2.19%.
Major European markets closed solidly higher. German (DAX) up 2.76%, France CAC 40 up 2.04%, London FTSE 100 up 1.69%.
Market And Sector Dynamics
Buoyed by better-than-expected Q2 earnings from CitiBank and Well Fargo, stocks opened today's trading in a positive risk-on mode. The Dow soared 145 points, Nasdaq up130 points, and S&P gained 76 points. Better than expected retail sales data was also a catalyst for markets in the session.
Crude oil was closed with gains today, but well off the highs reached in the last few months. The US 10 Year Bond remained subdued, down from the recent highs above 3.0% level, which also helped, particularly, shares of technology to rally today.
Today, investors chose to put concerns about inflation, and the Federal Reserve's aggressive interest rate hikes on the back burner, and bought a wide cross-section of shares that have been beaten during this year's ongoing bear market. My sense was that investors were gaining more confidence that the bear market was coming to an end.
Markets remained significantly elevated for the entire session, with the Dow ending the session at the high of the day. The rally was broad-based with all eleven S&P sectors finishing the day with gains, led by Financial, Healthcare, Communication Services, Energy, Technology, Consumer Discretionary, Real Estate, Basic Materials, Industrials, Consumer Staples, and Utilities.
Factors Influencing Today's Market
Investors were in risk-on mode today, ignoring the fear of inflation and aggressive Fed rate hikes.
June Retail Sales came in at 1.0% vs 0.9% consensus estimate, and a revised (-0.1%) for May.
Market sentiment was boosted today by blowout second-quarter earnings from CitiBank with Revenues up 11% to $19.64 billion. Shares of the big bank, including JPMorgan and Morgan Stanley which reported yesterday, rallied on that news.
July Consumer Sentiment was positive at 51.1 vs 50.0 estimated.
This week's Baker Hughes US Oil Rig count rose 2 to 599 total rigs.
The US 10 Year Bond Yield closed at 2.928%, down 1.0%
WTI crude oil closed the day at $97.59/barrel, up 0.97%, but well off the highs reached in June.
Market Close Volume Traded And Advance Decline Ratio
At the end of trading on Friday, all three major indexes were nicely higher, a welcome relief for the bulls. The Dow closed up 658.09 points, Nasdaq up 201.24 points, and the S&P was up 72.78 points. Total NYSE volume traded was a light 4.18 billion shares. Advancing shares outpaced Declining shares by 4.65:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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