Daily Market Report | Apr. 14, 2021
Dow Industrials Add More Than 200 Points, Poised for Record – Wall Street Journal, 4/14/2021
- U.S. stocks drifted higher Wednesday, hovering near record levels, as investors begin shifting their focus to the latest earnings-reporting season, starting with the biggest banks.
- The Dow Jones Industrial Average appeared to have more momentum, rising 155 points to 33829 in recent trading, led higher by Goldman Sachs Group after the bank reported sharply higher profits for the first quarter, benefiting from a turbocharged market and an economic recovery.
- Other large American businesses will report profits through the week.
- Investors are also awaiting a speech from Federal Reserve Chairman Jerome Powell at noon for clues on the health of the economy and his views on inflation.
- The yield on the 10-year Treasury note edged higher to 1.632%, from 1.622% on Tuesday. Yields rise as prices fall.
- Prices of cryptocurrencies led by bitcoin surged to record levels Wednesday ahead of the public listing of Coinbase Global.
- Bitcoin hit an all-time high of $64,228 apiece, ether climbed as high as $2,388 and dogecoin—the meme cryptocurrency created as a joke—surged 83% to $0.14, according to CoinDesk.
- In Asia, major stock indexes ended the day mostly higher. Hong Kong’s Hang Seng Index rose 1.4%, and the Shanghai Composite Index rose 0.6%. Japan’s Nikkei 225 fell 0.4%.
- Overseas, the Stoxx Europe 600 gauge edged up 0.3%.
Covid-19 Live Updates: U.S. Cases Rise; J&J Vaccine Use Is Suspended – Wall Street Journal, 4/14/2021
- Newly reported coronavirus cases in the U.S. rose, as the temporary suspension of Johnson & Johnson’s Covid-19 vaccine complicated vaccination efforts at some federal and state sites.
- The U.S. reported 77,878 new cases for Tuesday, according to the latest data compiled by Johns Hopkins University.
- Tuesday’s total was up from the 70,230 cases reported on Monday, and is similar to tallies seen last week, though it is higher than levels recorded in early-to-mid-March, according to Johns Hopkins data.
- The country reported 913 Covid-19 fatalities for Tuesday, bringing the total death toll to more than 563,400, according to Johns Hopkins data.
- U.S. health authorities on Tuesday recommended a pause in the use of Johnson & Johnson’s Covid-19 vaccine to investigate rare but severe cases of blood clots.
- The Food and Drug Administration and the Centers for Disease Control and Prevention announced the move Tuesday, after finding that six women between the ages of 18 and 48 years who got the vaccine had developed blood clots and one died.
- An average of 3.4 million doses of Covid-19 vaccine were administered each day over the past week, according to a Wall Street Journal analysis of CDC data. About 22.7% of U.S. residents are now fully vaccinated, while 36.8% have received at last one dose of a vaccine.
Federal Advisory Panel to Meet Wednesday on J&J Vaccine – Wall Street Journal, 4/14/2021
- A federal advisory panel will meet Wednesday to debate whether and how Johnson & Johnson’s Covid-19 vaccine should continue to be used in the U.S., following reports of rare but severe blood clots among a few recipients.
- The Advisory Committee on Immunization Practices, or ACIP, is expected to review clinical data gathered to date on six women between the ages of 18 and 48 years who developed blood clots after receiving J&J’s vaccine, according to a draft agenda of the meeting posted online Tuesday.
- The committee’s virtual emergency meeting, scheduled for three hours Wednesday afternoon, will be open to the public.
JPMorgan Profit Soars to Record After Bank Releases Reserves for Bad Loans – Wall Street Journal, 4/14/2021
- JPMorgan Chase posted a nearly fivefold increase in quarterly profit thanks to booming markets and an economic recovery that allowed it to free up $5.2 billion in funds it had set aside to cover soured loans.
- The bank reported revenue of $32.27 billion, up 14% from a year earlier.
- Corporate and investment bank profit nearly tripled to $5.74 billion, a quarterly record, and revenue rose 46% to $14.6 billion.
- Trading revenue rose 25% from a year ago, and investment-banking fees rose 57%.
- Revenue fell 6% in JPMorgan’s sprawling consumer business. In asset and wealth management, revenue rose 20%.
- Total loans fell about 4% from a year ago.
- Deposits surged another 6 percent from the previous quarter, to $2.28 trillion.
- The difference between what JPMorgan earns on loans and pays for deposits fell to 1.69% in the first quarter, down from 2.37% a year ago.
- The nation’s largest bank reported a record quarterly profit of $14.3 billion, or $4.50 per share, well above the $3.10 per share forecast by analysts polled by FactSet. A year earlier, JPMorgan reported a quarterly profit of $2.87 billion, or $0.78 a share.
Wells Fargo Earnings Jump as Economy Bounces Back – Wall Street Journal, 4/14/2021
- Wells Fargo said earnings soared in the first three months of the year after the bank released some of the money it put aside for bad loans earlier in the pandemic.
- Wells Fargo said it had revenue of $18.06 billion, up 2% from $17.72 billion a year earlier.
- That beat the $17.52 billion expected by analysts.
- The bank’s expenses declined from the previous quarter, but were still up from a year ago.
- They totaled $13.99 billion in the first quarter, up 7% from $13.05 billion a year earlier.
- Wells Fargo said its net interest income fell 22% to $8.8 billion from $11.31 billion a year earlier.
- Noninterest income, which includes fees, rose 45% to $9.27 billion from $6.41 billion a year earlier.
- Wells Fargo said that it released $1.05 billion from its reserves in the first quarter. Net charge-offs declined from a year ago.
- The San Francisco-based lender on Wednesday posted a profit of $4.74 billion for the first quarter, up from $653 million a year earlier.
Goldman Sachs profit soars on global deals frenzy, trading boom – Reuters, 4/14/2021
- Goldman Sachs surged past Wall Street expectations for first-quarter profit on Wednesday, as the U.S. investment banking giant capitalized on record levels of global dealmaking and a coronavirus-driven boom in equity trading.
- Total revenue more than doubled to $17.7 billion in the quarter, while financial advisory revenue came in at $1.1 billion.
- Revenue from equities trading jumped 68% to $3.69 billion as heightened trading by ordinary investors fed stock market volatility.
- An unprecedented boom in private firms merging with listed shell companies to go public helped Goldman earn handsome fees from such deals, resulting in a 73% jump in revenue from investment banking to $3.77 billion.
- Consumer banking revenue rose 32% in the quarter.
- The business is tiny compared to other large revenue generators at the firm, with consumer and wealth management representing just 10% of the total in the first quarter.
- Net earnings applicable to common shareholders rose to $6.7 billion in the quarter ended March 31. Earnings per share rose to $18.60 from $3.11 a year earlier.
Bed Bath & Beyond Shipping, E-Commerce Costs Hurt Profit – Bloomberg, 4/14/2021
- Bed Bath & Beyond’s shares plunged after higher shipping and e-commerce costs eroded profitability in the fourth quarter, tarnishing the results as the home-furnishings retailer reported a stronger-than-expected same-store sales gain.
- Sales for the full company, which includes Buybuy BABY, were $2.6 billion, declining from the same period a year earlier following the sale of noncore businesses and the closing of less-profitable locations.
- Fourth-quarter same-store sales rose 4% for the company, beating the 0.3% estimate compiled by Consensus Metrix.
- Same-store sales for Bed Bath & Beyond’s namesake brand increased 6% for the quarter, which ended Feb. 27.
- The increase in online sales and freight expenses led to higher costs for the company, contributing to a gross margin of 31.5%, which was below the estimate compiled by Bloomberg.
- The retailer said it would increase share buybacks planned for this fiscal year to $325 million from $300 million.
Boeing delivers 29 aircraft in March; orders positive for second straight month – Reuters, 4/14/2021
- Boeing said on Tuesday it delivered 29 aircraft in March, up from 20 a year earlier, with the U.S. planemaker’s net orders staying positive for the second straight month as airlines get ready for a recovery from the COVID-19 pandemic.
- Boeing’s net orders turned positive for the first time in 14 months in February as COVID-19 vaccine rollouts boosted the confidence of its customers.
- The plane manufacturer said it booked March gross orders of 196 aircraft, all of them for its 737 family of jets.
- Net of cancellations and conversions, Boeing had 40 jet orders for its 737 planes last month.
- Boeing’s gross orders for the first quarter were 282 airplanes.
- Net of cancellations and conversions, orders stood at 69 aircraft in the quarter.
- Adjusted for stricter accounting standards, Boeing’s net orders were 76 airplanes in the first quarter ended March.
- Boeing’s official backlog rose to 4054 aircraft orders in March from 4041 orders in February.
American Airlines Plans Expanded Summer Flying Schedule – Wall Street Journal, 4/14/2021
- American Airlines said Wednesday it is preparing to operate a nearly normal summer schedule, anticipating that widespread vaccination will unleash appetite for travel.
- American said it would fly 150 new routes this summer, and now expects to offer more than 90% of its pre-pandemic seating capacity within the U.S., and 80% of its international capacity.
- United Airlines Holdings, which last month announced plans for over two dozen new routes starting Memorial Day, recently told pilots in a town hall that over 40% of its flights from O’Hare International Airport are 90% full, a stark change from last spring when planes were flying nearly empty.
‘Fortnite’ Maker Epic Games Valued at Nearly $29 Billion in Funding Round – Wall Street Journal, 4/14/2021
- “Fortnite” creator Epic Games is now valued at $28.7 billion after raising more capital, funding that comes just weeks before the videogame company heads to trial against Apple.
- Epic on Tuesday said it completed a $1 billion funding round that includes an additional $200 million from Sony.
- The company, which also counts Walt Disney and China’s Tencent Holdings among its investors, was valued at $17.3 billion as of last August.
- Its chief executive, Tim Sweeney, remains the company’s controlling shareholder.
President Biden to Say It Is Time for U.S. Troops to Leave Afghanistan – Wall Street Journal, 4/14/2021
- President Biden plans to tell the nation Wednesday that it is time for the U.S. “to end America’s longest war,” as he announces a planned withdrawal of American troops from Afghanistan.
- In excerpts of his planned remarks released by the White House, Mr. Biden plans to say: “We went to Afghanistan because of a horrific attack that happened 20 years ago.
- That cannot explain why we should remain there in 2021.”
- Mr. Biden is expected to formally announce that he will withdraw troops by Sept. 11.
New York Democrats Push Repeal of Cap on Local Tax Deductions – Wall Street Journal, 4/14/2021
- More than a dozen New York Democratic lawmakers sent a letter to U.S. House leadership Tuesday asking for a full repeal of the cap on state and local tax deductions, adding pressure to negotiations over the Biden administration’s proposed infrastructure plan.
- The administration has called for paying for its infrastructure package by raising taxes on corporations. A growing number of House Democrats say any proposed changes to the tax code should include a full restoration of the SALT deductions.
- Republicans largely oppose the infrastructure proposal, and Democrats—who hold a seven-seat advantage in the House of Representatives—can afford to lose only a few votes on any legislation.
- That has given the growing group of lawmakers pushing for a repeal of the SALT cap significant influence on negotiations over the infrastructure package.
Iran Says It Will Enrich Uranium to 60%, in Effort to Strengthen Hand in Nuclear Talks – Wall Street Journal, 4/14/2021
- Iran will start enriching some of its stock of uranium to 60% for the first time, one of Iran’s leading nuclear negotiators said Tuesday, after an attack on its main nuclear facility.
- But the country’s negotiators will continue to participate in talks in Vienna on constraining its nuclear activities in return for a reversal of American economic sanctions on Tehran. Former U.S. officials said that Iran’s announcement appeared to be calculated to fortify Iran’s negotiating hand and counter the notion that its nuclear program had suffered a major setback.
- The comments from Abbas Araghchi, a deputy foreign minister, followed the apparent sabotage of Iran’s Natanz nuclear facility Sunday, which caused an electrical blackout that destroyed a number of centrifuges.
- Israeli media reported that the attack was carried out by the nation’s Mossad intelligence agency, though Israeli officials declined to comment. Iran has also blamed Israel.
EUROPE & WORLD
Germany’s economic institutes cut GDP 2021 growth forecast to 3.7% – sources – Reuters, 4/14/2021
- Germany’s economic institutes will cut their joint 2021 growth forecast for Europe’s largest economy to 3.7% from 4.7% previously due to a longer than expected COVID-19 lockdown, two people familiar with the decision told Reuters on Wednesday.
- The institutes, which are expected to release their joint growth forecast on Thursday, will lift their GDP growth estimate for 2022 to 3.9% from 2.7% previously as private consumption is expected to boost overall output, the sources added.
- The institutes’ estimates form the basis for the government’s own growth forecast which the economy ministry will present later this month.
Luxury Shares Soar as Louis Vuitton Shrugs Off Pandemic – Wall Street Journal, 4/14/2021
- Shares across Europe’s luxury-goods sector hit record highs Wednesday after LVMH Moët Hennessy Louis Vuitton reported a strong rebound in first-quarter sales, defying the pandemic’s drag on the global economy.
- Sales at LVMH reached 14 billion euros, equivalent to $16.75 billion, over the first three months of 2021, a 30% increase compared with a year earlier, stripping out the effect of currency changes and its acquisition of U.S. jeweler Tiffany.
- The first-quarter sales were 8% higher than the same period in 2019, before the pandemic.
- LVMH said its first-quarter sales in Asia, excluding Japan, increased 86% compared with the same period last year and 26% from the first quarter of 2019.
- In the U.S., sales rose 23% compared with the first quarter of 2020 and 15% from the first three months of 2019.
- Stripping out currency swings, sales in LVMH’s fashion and leather-goods division rose 52% from a year earlier to €6.7 billion in the first quarter.
- The company’s wines and spirits unit, which includes Hennessy cognac and Moët & Chandon Champagne, logged a 36% increase while its jewelry and watches business rose 35%, stripping out the effects of the Tiffany acquisition.
India’s Migrants Flee to Their Villages as Covid-19 Prompts New Lockdown – Wall Street Journal, 4/14/2021
- As Covid-19 roars back in India, migrant workers who had just started to resettle in the cities they left during last year’s outbreak are packing up to return to their villages again.
- Mumbai and its state of Maharashtra are at the center of the fastest-growing outbreak in the world, with more than 150,000 new cases a day across India. The western state has imposed nighttime curfews and shut down malls, eateries, bars and places of worship.
- A complete lockdown, with most people required to stay at home, could be coming soon, said Rajesh Tope, the health minister for the state.
- Workers and policy makers are trying to avoid the messy mass migration of 2020, when the sudden announcement of nationwide lockdown gave people hours to react and left millions of workers from villages stranded in the cities.
Factmonster – TODAY in HISTORY
- Benjamin Rush was among those who founded the first American antislavery society. (1775)
- Abraham Lincoln was assassinated by John Wilkes Booth. (1865)
- Titanic hit the iceberg that would sink her the next morning. (1912)
- In a record breaking night at the Academy Awards, a tie between Katherine Hepburn and Barbra Streisand resulted in the two sharing the Best Actress Oscar and Hepburn broke the record as the only actress to win three Best Actress Oscars. (1969)
- Hugo Chávez returned as president of Venezuela after being forced out of office two days previously. (2002)
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Historical performance is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. Any economic forecasts set forth may not develop as predicted.
All company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.
Material presented is excerpts derived from third party content and you may need a subscription to access the full the content. The views and opinions expressed are those of the authors and do not necessarily reflect the views of Pence Wealth Management or LPL Financial.
Prior to making any investment decision please consult your financial advisor regarding your specific situation.