After an avalanche of quarterly reports and ominous news from the failing First Republic Bank, Wall Street ended a controversial week with what turned out to be a broad rally for the evening:
- The S&P 500 rose 0.8 percent
- The Dow Jones Industrial Average rose 0.8 percent
- The Nasdaq Composite Index rose 0.7 percent
It was also the last trading day in April – the Nasdaq Composite finished the month virtually unchanged since the end of March, while the S&P 500 and Dow Jones combined rose 1.5 and 2.5 percent, respectively.
For the Dow, April ended as the strongest month since January.
On Friday, CNBC reported that the most likely outcome of First Republic bank failure now is for the Federal Deposit Insurance Corporation (FDIC) to take over, as it did with Silicon Valley Bank in March. The media refers to sources close to the process.
And so, First Republic Bank’s new price collapse was a reality, and the overall share fell 43.3 percent on Friday. And on Tuesday and Wednesday, the stock fell by 35 and 30 percent, respectively, due to new reports that the bank is in contact with the US authorities, and that the US authorities are trying to convince other US banks to bail out the First Republic.
Roughly 97 per cent of the First Republic’s shareholder value has diminished since the Silicon Valley collapse.
New inflation figures
One hour before the markets open, the PCE Inflator, the Fed’s preferred inflation indicator, was released.
It showed that core inflation ended at 4.2 percent in March, 0.1 percent higher than expected, while core inflation came exactly as expected: at 4.6 percent, unchanged from February.
At the same time, the wage index for the first quarter in the United States was also released – it shows a growth of 1.2 percent in the quarter, which is somewhat higher than what investors and economists had predicted in advance.
– This means that the pressure on the Fed remains high, Marius Gunsholt-Hof, chief economist at Handelsbanken to DN, said.
Next week, the US Central Bank (Fed) will make a new interest rate decision, in a week full of central bank decisions.
On the other hand, this week was mainly about company news, with quarterly reports from east and west, especially from Tuesday.
beats expectations
Many of the biggest tech companies came away with reports that far exceeded the expectations of analysts, who were heading into the quarter season at their most pessimistic since 2009 toward the sector.
Now, an overview from FactSet shows that 80 percent of the 261 total S&P 500 companies that have so far delivered quarterly numbers beat expectations.
This also applies to Amazon, which released its quarterly report right after the stock market closed on Thursday. The stock jumped in post-market trading — but they will be penalized when actual trading opens on Friday. The share fell four percent after weak growth in sales from Amazon Cloud Services in the quarter.
Still, Snap stock is down as much as Thursday’s after-hours trading suggests — in the space of a few minutes, the share price is down 17.1 percent. The company came out Thursday night with quarterly numbers, revealing a pre-tax loss that was much larger than expected.
Intel also released quarterly numbers Thursday night — and despite the fact that the previous quarter’s income drop was the largest in the company’s history, the stock was up four percent on Friday.
CNBC reports that the company beat analyst estimates for both top and bottom earnings. (conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We’d like you to share our statuses using links that lead directly to our pages. Reproduction or other use of all or part of the Content may be made only with written permission or as permitted by law. For more terms see here.
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