Earnings focus on US banks as Chinese lithium price bottoms
The S&P 500 rose Monday as traders combed through the latest batch of corporate earnings results, searching for clues on the health of corporate America.
The S&P 500 rose 0.33 per cent to finish at 4,151.32, while the Dow Jones Industrial Average gained 100.71 points, or 0.3 per cent, to end at 33,987.18. The Nasdaq Composite added 0.28 per cent to settle at 12,157.72.
Earnings season pressed on with results from State Street and Charles Schwab before the bell. Schwab shares, which have come under pressure amid fears that the brokerage firm may suffer a similar fate to Silicon Valley Bank, rose 3.9 per cent on a profit beat despite a decline in deposits. State Street fell 9.2 per cent after missing estimates on the top and bottom lines.
Behind the numbers both Charles Schwab & State Street suffered billions in combined bank deposit outflows in the first quarter as customers continued to move their money in search of higher returns.
Wall Street is closely monitoring the health of financial names this earnings period after Silicon Valley Bank’s collapse last month spurred a liquidity crisis and rocked the broader sector.
As companies grapple with sticky inflation and higher rates, many investors have braced for a downbeat earnings season, but data from Bank of America suggests that companies so far are hanging on. Of the names that reported during week one, 90 per cent topped EPS estimates. That’s the best beat rate to start earnings season since at least 2012, the bank said.
The reporting period for financial companies presses on this week with results from Bank of America, Goldman Sachs and Morgan Stanley. Outside of financials, reports from electric vehicle heavyweight Tesla, IBM and Netflix are also due out.
Elsewhere, the S&P’s communication services sector slumped 1.3 per cent, led to the downside by declines from tech giants Alphabet, Netflix and Meta Platforms. The Google parent company fell more than 2 per cent as The New York Times reported that Samsung is weighing making Bing its default search engine.
In commodity news, the lithium price China’s lithium market is showing signs of bottoming out. Smaller producers are looking to stem losses after the price of the key battery material collapsed by over two-thirds in just five months. Thin stockpiles and improved prospects for battery storage and electric vehicle sales suggest that demand may be about to recover.
The SPI futures are pointing to a 0.2 per cent fall.
One Australian dollar at 7:10 AM is buying 67.01 US cents..
Iron ore futures are pointing to a 2.01 per cent gain.
Gold lost 0.44 per cent. Silver fell 1.46 per cent. Copper lost 0.89 per cent and oil dropped 2.05 per cent.
Figures around the globe
Across the Atlantic, European markets closed mixed. London’s FTSE gained 0.1 per cent, Frankfurt lost 0.1 per cent while Paris closed 0.3 per cent lower.
In Asian markets, Tokyo’s Nikkei added 0.1 per cent, Hong Kong’s Hang Seng gained 1.68 per cent and China’s Shanghai Composite closed 1.42 per cent higher.
Yesterday, the Australian sharemarket closed 0.27 per cent higher at 7382
Katana Capital (ASX:KAT) is paying 0.5 cents fully franked
Kelly Partners Group (ASX:KPG) is paying 0.3993 cents fully franked
COG Financial Services (ASX:COG)
Sigma Healthcare (ASX:SIG)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.