Coffee With Greta: Inflation And Earnings
DJIA Futures: +2 (+0.01%) SPX Futures: +3 (+0.1%) NASDAQ Futures: -33 (-0.2%) Good morning friends! Futures are mixed as traders digest new inflation data and the latest batch of earnings. Let’s get right to it! Fed’s Preferred Inflation Gauge The Fed’s preferred inflation gauge showed annual price increases were lower than expected at the end of 2023. The Commerce Department’s personal consumption expenditures (PCE) price index rose 0.2% monthly and 2.6% year over year. The core PCE price index, which is the Fed’s preferred measure, rose 0.2% monthly and 2.9% annually. That was lighter than expectations for a 3% annual increase and down from the 3.2% change in November. Consumer spending rose 0.7% in December, stronger than 0.5% expected. Personal income growth slipped to 0.3%, in line with expectations. Intel Outlook Falls Short Intel (INTC) shares are down 10.0% ahead of the open after beating Q4 expectations but issuing weak guidance. Here’s how the chipmaker’s results compared to analysts’ estimates: Adjusted EPS: $0.54 vs $0.45 expected Revenue: $15.4 billion vs $15.15 billion expected The company’s revenue rose 10% year over year, breaking a seven quarter streak of declining revenue. Intel forecast Q1 EPS of $0.13 on $12.2 billion to $13.2 billion in revenue. That missed analysts’ expectations of $0.33 in EPS on $14.15 billion in revenue. Levi Strauss Revenue Misses, Layoffs Announced Levi Strauss (LEVI) shares are slipping 1.1% in premarket trade after reporting mixed Q4 results and issuing a weak outlook. Here’s how the denim giant’s results compared to analysts’ estimates: Adjusted EPS: $0.44 vs $0.43 expected Revenue: $1.64 billion vs $1.66 billion expected Revenue rose 3% year over year. Levi projected revenue will rise between 1% and 3% for the full fiscal year, lower than 4.7% expected. The company forecast full-year earnings of $1.15 to $1.25 per share vs $1.33 expected. Levi also announced it will lay off at least 10% of its global corporate workforce as part of a restructuring. Those cuts are expected to take place in the first half of this year and could impact up to 15% of corporate employees. In Case You Missed It New home sales rose more than expected in December. The Census Bureau reported sales of newly built homes jumped 8% to a seasonally adjusted annual rate of 664,000 units last month. That was stronger than expectations for an SAAR of 649,000. The increase came as mortgage rates dropped below 7%, increasing demand in the market. The median sales price of a new home sold in December fell to $413,200 from $426,000 in November. The supply of new homes for sale fell 6.8% on a monthly basis. New home sales were up 4.4% year over year.
Continue Reading -->Coffee With Greta: TSLA Tanks
DJIA Futures: +87 (+0.2%) SPX Futures: +19 (+0.4%) NASDAQ Futures: +87 (+0.5%) Good morning friends! Futures are up after the release of strong economic data. Let’s get right to it! Tesla Tumbles After Q4 Miss, Weak Outlook Tesla (TSLA) shares are dropping 8.8% ahead of the open after missing Q4 expectations and issuing weak guidance for 2024. Here’s how the electric automaker’s results compared to analysts’ estimates: Adjusted EPS: $0.71 vs $0.74 expected Revenue: $25.17 billion vs $25.6 billion expected Total revenue rose 3% year over year with automotive revenue up just 1%. Tesla’s operating margin for the quarter was 8.2% vs 16% a year ago but up from 7.6% in Q3. The company said its vehicle volume growth in 2024 “may be notably lower” than last year as it works toward launching its “next-generation vehicle” in Texas. Q4 GDP Growth Tops Estimates The U.S. economy was much stronger than expected at the end of 2023. The Commerce Department’s first estimate shows GDP increased at a 3.3% annualized pace in the fourth quarter. That was better than economists’ expectations for a 2% growth rate and down from 4.9% in Q3. For the full year 2023, the U.S. economy expanded 2.5%. Consumer spending rose 2.8% in Q4, state and local government spending rose 3.7%, and federal government expenditures increased 2.5%. The PCE price index during the quarter, which is a measure of inflation, rose 2.7% vs 5.9% a year ago. The core PCE price index rose 3.2% vs 5.1% in Q4 2022. On a quarterly basis, headline inflation rose 1.7% while core inflation rose 2% from Q3. Weekly Jobless Claims Jump The number of new unemployment claims rose more than expected last week. The Labor Department reported 214,000 Americans filed initial claims for unemployment benefits. That was up by 25,000 from the previous week and higher than 199,000 expected. Continuing claims rose by 27,000 to 1.833 million in the week ending January 13. American Airlines Jumps On Earnings, Guidance Beat American Airlines (AAL) shares are rising 4.5% in premarket trade after beating Q4 expectations and issuing strong guidance. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $0.29 vs $0.11 expected Revenue: $13.1 billion vs $13 billion expected Load factor, which measures how much passenger carrying capacity is used, came in at 83.6% vs 82.9% expected. American forecast full-year 2024 EPS between $2.25 and $3.25 vs $2.14 expected. The CEO said, “We are delivering on our commitments and remain well-positioned for the future, supported by the strength of our network and travel rewards program, our young and simplified fleet, our operational reliability, and our outstanding team.” Southwest Tops Q4 Estimates Southwest Airlines (LUV) are up 2.2% ahead of the open after beating Q4 expectations. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $0.37 vs $0.12 expected Revenue: $6.8 billion vs $6.75 billion expected Revenue per available seat mile (RASM) decreased 8.9% year over year. Load factor fell to 78.2% from 83.5% a year ago, missing expectations for 81.7%. Southwest forecast Q1 RASM will increase 2.5% to 4.5% yaer over year. The CEO said, “We currently expect to grow our full year 2024 available seat miles roughly 6%, year-over-year, all of which is carryover from 2023 network restoration related growth.” In Case You Missed It Meta Platforms (META) briefly surpassed a $1 trillion market cap during Wednesday’s session. The stock popped to around $396 per share to hit the milestone for the first time since 2021. META closed 1.4% higher at $390.70. Meantime, Microsoft (MSFT) briefly crossed $3 trillion in market value on Wednesday when the stock hit around $404 per share. MSFT closed 0.9% higher at $402.56 per share.
Continue Reading -->Coffee With Greta: NFLX Delivers
DJIA Futures: +140 (+0.4%) SPX Futures: +25 (+0.5%) NASDAQ Futures: +138 (+0.8%) Good morning friends! Futures are higher as tech stocks rise after Netflix’s (NFLX) strong Q4 results. Let’s get right to it! Netflix Rallies Netflix (NFLX) shares are rallying 10.6% ahead of the open after beating Q4 subscriber and revenue expectations. Here’s how the streaming giant’s results compared to analysts’ estimates: EPS: $2.11 vs $2.22 expected Revenue: $8.83 billion vs $8.72 billion expected Total memberships: 260.8 million vs 256 million expected The company added 13.1 million subscribers during the quarter, blowing past expectations of 8 million to 9 million. Netflix raised its 2024 operating margin forecast to 24% from 22% to 23% previously. The company expects EPS of $4.49 in Q1 vs analysts’ $4.10 estimate. Texas Instruments Revenue Falls Short Texas Instruments (TXN) shares are falling 2.8% in premarket trade after reporting mixed Q4 results and issuing weak guidance. Here’s how the chipmaker’s results compared to analysts’ estimates: EPS: $1.49 vs $1.47 expected Revenue: $4.08 billion vs $4.12 billion expected Revenue fell 13% year over year. The company’s CEO said, “During the quarter we experienced increasing weakness across industrial and a sequential decline in automotive.” Texas Instruments forecast Q1 revenue of $3.45 billion to $3.75 billion vs $4.05 billion expected. AT&T Slips On Weak Results AT&T (T) shares are down 2.7% ahead of the open after missing Q4 earnings expectations. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $0.54 vs $0.56 expected Revenue: $32 billion vs $31.46 billion expected Revenue was up slightly on an annual basis. Revenue in the wireless services division rose 3.9% from a year ago but business wireline sales dropped 10.3%. The number of customers who added new lines during the quarter came in at 526,000 vs 487.500 expected. AT&T had Q4 free cash flow of $6.4 billion vs $6.1 billion expected. The company forecast adjusted full-year 2024 EPS of $2.15 to $2.25 vs $2.46 expected. Mortgage Demand Rises Mortgage applications rose last week even as rates inched higher. The Mortgage Bankers Association reported purchase applications rose 8% from a week ago but were still down 18% year over year. That jump appeared to be driven by strong buyer demand after the holidays. An MBA economist said, “Conventional and FHA purchase applications drove most of the increase last week as some buyers moved to act early this season.” Refinance applications fell 7% weekly and 8% annually. The average 30-year fixed contract rate rose to 6.78% from 6.75%.
Continue Reading -->Coffee With Greta: Record Climb Continues
DJIA Futures: -25 (-0.1%) SPX Futures: +9 (+0.2%) NASDAQ Futures: +45 (+0.3%) Good morning friends! Futures are mixed with the S&P 500 continuing its record-setting climb as traders digest new earnings. Let’s get right to it! United Airlines Earnings Beat United Airlines (UAL) shares are up 6.9% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the airline’s results compared to analysts’ estimates: Adjusted EPS: $2.00 vs $1.69 expected Revenue: $13.63 billion vs $13.54 billion expected Revenue jumped nearly 10% year over year. But United forecast a Q1 loss due to the FAA’s grounding of Boeing (BA) 737 Max 9 planes. The company expects an adjusted loss of $0.35 to $0.85 per share in the current quarter. United has 79 of the grounded aircraft in its fleet, the most of any airline. The company expects the planes to remain grounded through January 26. For the full year, United forecast adjusted EPS between $9 and $11 which was in line with analysts’ estimates. Johnson & Johnson Flat After Earnings Johnson & Johnson (JNJ) shares are up 0.1% in premarket trade after beating Q4 expectations. Here’s how the pharmaceutical giant’s results compared to analysts’ estimates: Adjusted EPS: $2.29 vs $2.28 expected Revenue: $21.40 billion vs $21.01 billion expected Revenue jumped 7.3% year over year. Medical device sales were up 13.3% from a year ago to $7.67 billion vs $7.50 billion expected. Pharmaceutical sales rose 4.2% to $13.72 billion with no sales of its Covid vaccine in the U.S. The company forecast full-year 2024 adjusted EPS of $10.55 to $10.75 on $87.8 billion to $88.6 billion in revenue. Procter & Gamble Price Hikes Boost Revenue Procter & Gamble (PG) shares are up 2.6% ahead of the open after reporting mixed Q4 results. Here’s how the consumer goods giant’s results compared to analysts’ estimates: Adjusted EPS: $1.84 vs $1.70 expected Revenue: $21.44 billion vs $21.48 billion expected Price hikes helped boost P&G’s revenue 3% year over year during the quarter. That helped offset some of the impact of writing down the value of razor brand Gillette by $1.3 billion. As consumers paid higher prices, sales volumes declined. Volume in the grooming division fell 1%, the beauty segment reported flat sales volumes, health care reported a 3% volume decline, and the feminine, baby and family care business saw sales volumes shrink 2%. For fiscal 2024, Procter & Gamble forecast core EPS growth of 8% to 9% vs 6% to 9% previously. But the company expected unadjusted EPS to be flat to down 1% vs previous expectations for 6% to 9% growth. P&G reiterated its sales forecast of 2% to 4% this year.
Continue Reading -->Coffee With Greta: All-Time Highs
DJIA Futures: +80 (+0.2%) SPX Futures: +15 (+0.3%) NASDAQ Futures: +85 (+0.5%) Good morning friends! Futures are up as the S&P 500 looks set to build upon new all-time highs. Let’s get right to it! Fresh Record The S&P 500 is rising to start the new week of trade after hitting a new all-time high on Friday. The index broke both its intraday and closing records from January 2022 during the last session, confirming Wall Street is in a bull market that started in October 2022. Now traders are looking ahead to some important earnings and economic data releases this week. On the earnings calendar, Netflix (NFLX) reports after the close Tuesday, Tesla (TSLA) reports after the close Wednesday, Intel (INTC) reports Thursday, and more big companies are sprinkled in between. For economic data, the first estimate of Q4 GDP growth will be released Thursday morning while the Fed’s preferred inflation gauge, the PCE price index will be out Friday morning. This is the final inflation data to be released before the Fed’s first meeting of the year next week. Macy’s Rejects Private Takeover Offer Macy’s (M) shares are up 1.9% in premarket trade after the retailer rejected a private takeover offer. The company rejected a $5.8 billion proposal from Arkhouse Management and its partner Brigade Capital Management, citing concerns over deal financing and valuation. The investment firms submitted the proposal last month to acquire the Macy’s shares they don’t already own for $21 per share. Arkhouse said the see “the potential for a meaningful increase to the original proposal if we are granted access to the necessary due diligence.” But Macy’s said the offer was not financially attractive or credible enough to grant that access. Spirit, JetBlue To Appeal Blocked Merger Spirit Airlines (SAVE) shares are up 3.9% with JetBlue Airways (JBLU) shares slipping 0.4% ahead of the open after the companies said they would appeal a judge’s ruling to block their proposed merger. A federal judge blocked JetBlue’s proposed deal to acquire Spirit for $3.8 billion last Tuesday on antitrust grounds, saying removing Spirit from the market would create higher prices for customers. JetBlue said it was appealing the decision “consistent with the requirements of the merger agreement.”
Continue Reading -->Coffee With Greta: New Record Within Sight
DJIA Futures: +194 (+0.5%) SPX Futures: +22 (+0.4%) NASDAQ Futures: +111 (+0.7%) Good morning friends! Futures are up with the S&P 500 marching toward a fresh record high. Let’s get right to it! Wayfair Rallies On Job Cut Announcement Wayfair (W) shares are rallying 16.2% ahead of the open after announcing it is laying off 13% of its global workforce. The digital home goods retailer said it plans to cut around 1,650 employees. The company said this is part of its efforts to reduce costs after going “overboard” with corporate hiring during the pandemic. The cuts include 19% of its corporate team, focused on those in management and leadership positions. The restructuring is expected to save Wayfair about $280 million. Ford Announces Production Adjustments Ford Motor (F) shares are flat in premarket trade after announcing production changes this morning. The automaker said it will cut production of its all-electric F-150 Lightning pickup truck and increase production of the Bronco SUV and Ranger pickup truck. Ford said the changes are meant to match production with customer demand. The company will reduce production of the Lightning pickup at its Rouge Electric Vehicle Center in Michigan to one production shift from two starting April 1. The move will impact roughly 1,400 employees but Ford did not detail how it will impact production numbers. Nearly half of those impacted employees will transfer to nearby plants, including the Michigan Assembly Plant that produces the Bronco and Ranger. That plant will add a third shift in the summer to increase production of those two vehicles, adding 900 jobs to the plant. Other impacted workers will participate in a “Special Retirement Incentive Program” agreed to in the new UAW contract. Spirit Surges After Hiking Q4 Forecast Spirit Airlines (SAVE) shares are surging 26.5% ahead of the open after hiking its Q4 forecast. The discount airline said in a filing it expects quarterly revenue of about $1.3 billion, at the high end of its previously forecast range. Spirit estimates adjusted negative margins of 12% to 13%, better than the previous outlook for as much as a 19% negative margin. After the company’s merger with JetBlue Airways (JBLU) was blocked earlier this week, Spirit said it is now weighing options to refinance more than $1 billion in debt that matures in 2025. The airline said it had $1.3 billion of liquidity at the end of 2023. Spirit will announce Q4 results on February 8. In Case You Missed It Atlanta Fed President Raphael Bostic said Thursday he expects rate cuts to begin in the third quarter. But he also left the door open for a cut as early as July if the data supports such a move. Bostic said, “If we continue to see a further accumulation of downside surprises in the data, it’s possible for me to get comfortable enough to advocate normalization sooner than the third quarter.” He is a voting member of the FOMC this year. Traders are still pricing in the first rate cut as early as March.
Continue Reading -->Coffee With Greta: Attempted Rebound
DJIA Futures: -74 (-0.2%) SPX Futures: +15 (+0.3%) NASDAQ Futures: +124 (+0.7%) Good morning friends! Futures are mixed as the S&P 500 and Nasdaq look to rebound. Let’s get right to it! Home Construction Slows, Tops Expectations U.S. new home construction slowed in December but still beat expectations. The Census Bureau reported housing starts fell 4.3% to a seasonally adjusted annual rate of 1.46 million units last month. That was better than economists’ expectations for 1.43 million. Single-family starts dropped 8.6% while multi-family starts rose 7.5%. But the pace of construction is expected to pick-up in the months ahead as new permits issued rose. Permits rose 1.9% to a seasonally adjusted annual rate of 1.5 million units vs 1.48 million expected. Single-family permits rose 1.7% while multi-family permits rose 1.4%. Weekly Jobless Claims Drop Under 200,000 Weekly jobless claims fell unexpectedly last week in the latest sign of strength for the labor market. The Labor Department reported 187,000 Americans filed initial claims for unemployment benefits. That was down by 16,000 from the previous week and sharply lower than 208,000 expected. It was also the lowest total of new claims in 16 months. Continuing claims fell by 26,000 to 1.81 million in the week ending January 6. Philly Fed Manufacturing Index Remains Negative A key manufacturing gauge remained in negative territory for the fifth straight month in January. The Philadelphia Fed’s manufacturing index was roughly unchanged at -10.6 this month. That was weaker than economists’ expectations for an improvement to -8. The employment index weakened to -1.8 from -1.7 while new orders improved to -17.9 from -25.6. The data showed signs of improving inflation as the prices paid index fell to 11.3 from 25.1 and prices received also fell to 6.3 from 13.6. In Case You Missed It Homebuilder confidence improved more than expected this month. The NAHB housing market index jumped seven points to 44 vs 39 expected. Sentiment about current sales conditions rose seven points to 48, buyer traffic rose five points to 29, and 6-month sales expectations jumped 12 points to 57.
Continue Reading -->Coffee With Greta: Yields Continue Climbing
Register now for today’s free options trading webinar with David Prince after the market close! DJIA Futures: -182 (-0.5%) SPX Futures: -31 (-0.6%) NASDAQ Futures: -148 (-0.9%) Good morning friends! Futures are lower as traders digest strong retail sales data and yields continue to climb. Let’s get right to it! Retail Sales Beat Expectations Consumer spending was stronger-than-expected during the key holiday shopping season. The Commerce Department reported retail sales rose 0.6% in December to $709.9 billion. That topped economists’ expectations for a 0.4% increase. The strongest gains were at clothing retailers and online stores, where sales rose 1.5%. Sales increased 1.3% at general merchandise stores and 1.2% at car dealerships. Gas station sales dropped 1.3% as prices continued to fall. For the full-year, retail sales were up 5.6% compared to December 2022. Excluding autos, retail sales rose 0.4% monthly vs 0.2% expected. Yields Push Higher Treasury yields are climbing further this morning as the market digests that new retail sales data and commentary from Fed officials. The 10-year yield is up four basis points at 4.11% while the 2-year yield is up 11 basis points at 4.33%. Fed Governor Christopher Waller indicated on Tuesday that rate cuts may take longer to begin than the market has been anticipating. He said, “In many previous cycles … the FOMC cut rates reactively and did so quickly and often by large amounts. This cycle, however, … I see no reason to move as quickly or cut as rapidly as in the past.” CME Group’s FedWatch Tool now shows around 57% of traders expecting the first cut at the March 20 meeting, down from around 65% earlier this month. Mortgage Demand Surges Mortgage demand rose sharply last week as lower rates attracted homebuyers. The Mortgage Bankers Association reported total application volume jumped 10.4%. Purchase applications rose 9% weekly but were still down 20% year over year. Refinance applications rose 11% weekly and 10% annually. The increase came as the average 30-year fixed contract rate fell to 6.75% from 6.81%. Rates have moved slightly higher with yields this week though with Mortgage News Daily showing the current rate at 6.77%. Tesla Slashes Prices In Europe Tesla (TSLA) shares are falling 2.4% in premarket trade after cutting prices for its Model Y cars across several European countries. The electric automaker lowered prices on its cars in Germany, France, Norway, and the Netherlands. In Germany, the RWD Model Y now sells for 42,990 euros ($46,760.65), down 4.2% from its previous retail value. The Model Y Long Range now costs 49,990 euros, down 8.1% from the previous price. Tesla lowered prices by as much as 6.7% in France, by up to 7.7% in the Netherlands, and between 5.6% and 7.1% in Norway. Judge Blocks JetBlue-Spirit Merger Spirit Airlines (SAVE) shares are tumbling 12.4% ahead of the open after a federal judge blocked JetBlue Airways (JBLU) proposed purchase of the discount airline on Tuesday. JBLU shares are also down 0.6% and SAVE shares plummeted 47.1% on Tuesday. The U.S. District Court judge wrote, “JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers. The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.” The Justice Department sued to stop the merger claiming it would drive-up fares for consumers. In response to the decision, the Attorney General said, “Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward.”
Continue Reading -->Coffee With Greta: More Bank Earnings
DJIA Futures: -147 (-0.4%) SPX Futures: -21 (-0.4%) NASDAQ Futures: -77 (-0.5%) Good morning friends! Futures are lower to start the new week of trade. Let’s get right to it! Goldman Sachs Top Earnings Estimates Goldman Sachs (GS) shares are down 0.5% ahead of the open despite beating Q4 expectations. Here’s how the investment bank’s results compared to analysts’ estimates: EPS: $5.48 vs $3.51 expected Revenue: $11.32 billion vs $10.80 billion expected Earnings jumped 51% year over year while companywide revenue rose 7%. Asset and wealth management revenue jumped 23% from a year earlier to $4.39 billion, topping estimates by nearly $550 million. Equities trading revenue rose 26% to $2.61 billion vs $2.22 billion expected. Fixed income trading revenue dropped 24% $2.03 billion vs $2.53 billion expected. Investment banking fees fell 12% to $1.65 billion, matching estimates. CEO David Solomon said, “With everything we achieved in 2023 coupled with our clear and simplified strategy, we have a much stronger platform for 2024.” Morgan Stanley Drops Despite Revenue Beat Morgan Stanley (MS) shares are dropping 3.2% in premarket trade despite beating Q4 revenue expectations as earnings fell short. Here’s how the investment bank’s results compared to analysts’ estimates: EPS: $0.85 vs $1.07 expected Revenue: $12.9 billion vs $12.75 billion expected Net income was down more than 30% year over year as the bank got hit with one-time regulatory charges. Wealth management revenue totaled $6.65 billion up slightly from $6.63 billion a year ago. Investment management totaled $1.46 billion, little changed from last year. Key Manufacturing Gauge Tumbles A key manufacturing gauge tumbled further into negative territory to start the new year. The Empire State manufacturing index dropped 29.2 points this month to -43.7. That’s the lowest reading since May 2020 and lower than economists’ expectations for the index to rise to -4. The new orders index dropped 38.1 points to -49.4 in January and the shipments index fell 24.9 points to -31.3. But optimism for the future continued to pick up. The future business conditions index rose 7 points to 18.8 while capital spending increased 10 points to 13.7.
Continue Reading -->Coffee With Greta: Bank Earnings Rush
DJIA Futures: -104 (-0.3%) SPX Futures: -3 (-0.1%) NASDAQ Futures: -9 (-0.1%) Good morning friends! Futures are slipping after the release of positive inflation data as traders digest big bank earnings. Let’s get right to it! PPI Surprise Wholesale inflation pressures unexpectedly fell at the end of 2023. The Bureau of Labor Statistics’ producer price index fell 0.1% monthly in December and rose 1% year over year. That was lower than expectations for a 0.1% monthly and 1.3% annual gain. It was the third straight monthly decline. The core PPI was unchanged for the month and up 1.8% annually vs expectations for 0.2% monthly and 2% annually. The PPI is a leading indicator for consumer prices and considered a good gauge for future inflation pressures. JPMorgan Chase Beats Q4 Estimates JPMorgan Chase (JPM) shares are up 2.1% ahead of the open after beating Q4 expectations on the top and bottom line. Here’s how the largest bank in the U.S.’s results compared to analysts’ estimates: Adjusted EPS: $3.97 vs $3.35 expected Revenue: $39.9 billion vs $39.73 billion expected The bank incurred a $2.9 billion fee from the FDIC during the quarter for its rescue of regional banks. Q4 net interest income was $24 billion excluding markets vs $23 billion expected. For the full-year, net interest income excluding markets totaled $94 billion. In Q4, corporate and investment bank market revenue rose 2% to $5.8 billion. Gross investment banking and markets revenue rose 32% to $924 million. Assets under management jumped 24% to $3.4 trillion. JPMorgan forecast 2024 net interest income excluding markets of $88 billion vs $86.5 billion expected. The bank generated nearly $50 billion in profit in 2023, $4.1 billion of which came from First Republic Bank. CEO Jamie Dimon said, “The U.S. economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing. It is important to note that the economy is being fueled by large amounts of government deficit spending and past stimulus.” Citigroup Tops Q4 Earnings Expectations Citigroup (C) shares are rising 1.9% in premarket trade after beating Q4 earnings expectations but missing on revenue. Here’s how the investment bank’s results compared to analysts’ estimates: Adjusted EPS: $0.84 vs $0.81 expected Revenue: $17.44 billion vs $18.74 billion expected On an unadjusted basis, the bank posted a $1.8 billion loss in the quarter after booking charges tied to overseas risks, the regional banking crisis, and CEO Jane Fraser’s corporate overhaul. Those charges hit earnings by $4.66 billion and were larger than what CFO Mark Mason had previously disclosed. Fraser called the bank’s performance “very disappointing” because of the charges but said Citigroup had made “substantial progress” simplifying the bank last year. Bank Of America Drops As Earnings Fall Bank of America (BAC) shares are down 2.5% ahead of the open after reporting a sharp drop in earnings year over year. Here’s how the bank’s results compared to analysts’ estimates: Adjusted EPS: $0.70 vs $0.53 expected Revenue: $22 billion vs $23.7 billion On an unadjusted basis, net income tumbled to $3.1 billion from $7.1 billion a year ago. Bank of America incurred a $2.1 billion fee from the FDIC related to its rescue of regional banks earlier in the year. Net interest income fell 5% to $139.9 billion while non-interest income fell by $1.8 billion to $8.0 billion. The bank boosted its loan loss reserves by $12 million to $1.1 billion. The consumer banking division had net income of $2.8 billion, with revenue down 4% to $10.3 billion. The global wealth and investment-management segment had net income of $1 billion, as client balances rose 12% to $3.8 trillion. The global banking division had net income of $2.5 billion, as investment banking fees rose 7% to $1.1 billion. The global markets division had net income of $636 million, as sales and trading revenue rose 3% to $3.6 billion. Fixed income, currencies and commodities income fell 4% to $2.1 billion. Equities trading revenue rose 13% to $1.5 billion. Wells Fargo Slips Despite Higher Profit Wells Fargo (WFC) shares are down 1.5% ahead of the open after reporting Q4 earnings that were in line with expectations and beating on revenue. Here’s how the consumer bank’s results compared to analysts’ estimates: EPS: $0.86, as expected Revenue: $20.48 billion vs $20.30 billion expected Wells Fargo boosted its loan loss reserves by 34% to $1.28 billion in the quarter. CEO Charlie Scharf said, “We are closely monitoring credit and while we see modest deterioration, it remains consistent with our expectations.” The bank’s net interest income fell 4.9% to $12.77 billion vs $12.76 billion expected. Non-interest income rose 16.8% to $7.71 billion vs $7.51 billion expected, amid higher trading revenue and investment banking fees. Delta Slides On Lower Guidance Delta Airlines (DAL) shares are dropping 5.2% in premarket trade after beating Q4 expectations but lowering guidance. Here’s how the airline’s results compared to analyst’ estimates: Adjusted EPS $1.28 vs $1.17 expected Adjusted revenue: $13.66 billion vs $13.52 billion expected The company’s net income jumped to $2.04 billion from $828 million a year ago. A record number of passengers paid to sit in higher-priced cabins during the quarter, driving premium cabin revenue up 15% vs 10% growth in standard coach revenue. Delta said it expects Q1 revenue to increase 3% to 6% year over year with EPS between $0.25 and $0.50, in line with estimates. For the full year, the airline forecast adjusted EPS between $6 and $7, below the over $7 forecast the company previously predicted.
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