October 13, 2020
stock market today
The US stock market today closed lower, small-cap stocks underperformed. Dow Jones fell 157 points, S&P 500 lost 22 points. The closing numbers for the stock market oday at the close:
S&P 500: 3,511.93,-22.29(-0.63%)
Dow 30: 28,679.81,-157.71(-0.55%)
Russell 2000: 1,636.85,-12.21(-0.74%)
stock market news
“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.”
Stock market data: Yahoo Finance
As for the third quarter itself, JPMorgan posted strong trading results and far fewer reserves to cover loan losses.
JPMorgan earned $2.92 a share, well above estimates for $2.35 a share. Revenue of $29.94 billion beat estimates for $28.63 billion.
The banking giant set aside just $611 million for loan loss reserves, far less than the $2.88 billion expected and down from $10.4 billion in the second quarter. Net interest income dropped 9% to $13 billion.
Fixed income trading revenue grew 29% to $2.6 billion, and equity trading revenue climbed 32% to $2 billion. Investment banking revenue rose 9% to $2.09 billion. Consumer banking revenue slipped 9% to $12.75 billion. Commercial banking revenue was flat at $2.29 billion. Asset management revenue increased 5% to $3.78 billion.
JPMorgan stock fell 1.6% to 100.78 in the stock market today. Shares on Monday were above their 50-day line but below their 200-day line. JPMorgan stock, as with other bank stocks, has weak ratings from IBD. It has a 30 Composite Rating. Its EPS Rating is 49.
In September, JPMorgan agreed to pay $920 million to resolve U.S. investigations into alleged manipulation of precious metals and U.S. treasuries markets.
In July, during the second-quarter JPMorgan earnings call, CFO Jennifer Piepszak said the economy faced a “moment of truth” in the months ahead, as coronavirus relief funds for individuals and businesses began to thin out.
“You will see the effect of this recession,” CEO Jamie Dimon said. “You’re just not going to see it right away.”
Citigroup, meanwhile, earned $1.40 per share, above estimates for $1.01. Revenue of $17.3 billion topped estimates for $17.21 billion.
Citigroup added $314 million to its net allowance for credit losses, compared to $5.6 billion in Q2, with the total cost of credit up diving to $2.26 billion from $7.9 billion in Q2. Net credit losses declined to $1.9 billion from $2.2 billion in Q2.
Fixed income trading revenue grew 18% to $3.79 billion, and equity trading revenue rose 15% to $875 million. Investment banking climbed 13% to $1.39 billion. Consumer banking revenue fell 13% to $7.17 billion.
Citigroup stock slid 4.8%. The stock has a Composite Rating of 12. Its EPS Rating is 47. Shares were below their 50-day and 200-day lines.
Last month, CFO Mark Mason telegraphed lower sales for the quarter, as the Fed keeps interest rates low — an effort to keep borrowing cheap — and the pandemic weighs on consumer spending and investment banking. He also noted a “slower pace” of hiring in the U.S.
Still, he touted the company’s efforts to lean down since the 2008 financial crisis and focus on wealthier customers and multinationals. He said trading in the quarter remained solid, and that the reserves the company planned to set aside for bad loans would be significantly less than earlier in the year.
CEO Michael Corbat will step down from that position in February. Jane Fraser, head of Citi’s global consumer banking business, will take his place.
Among other bank stocks, Wells Fargo (WFC) fell 3.7%, and Bank of America (BAC) lost 2.8%. Goldman Sachs (GS) fell 1.55%. Those banks report later in the week.
Stock market data: Investors