Markets played it pretty close to home base today, excepting the small-cap Russell 2000, which has been more or less dancing to its own tune for the past couple weeks — and sped past the field by 100 basis points (bps). The Dow closed up +100 points even, +0.30%, while the S&P 500 was at parity, also +0.30%. The Nasdaq ended the session +0.28% and the Russell closed +1.22%. All indices hit the bell at session highs.
Part of the positive bias we’ve seen lately does have to do with Q1 earnings season. Though it begins in dribs and drabs — even when things heat up a bit this week, it will be no comparison to the amount of earnings results hitting the tape over the next three weeks or so — we have heard from the Finance sector, and partly from regional banks. And with regional banks blooming much of the fear in the market going back to the failure of SVB last month, equities had been discounted ahead of Q1 earnings season.
We’ve got a long way to go, even among regional banks in Q1, but some key regional banks have already reported and offered some relief to market participants: PNC Financial PNC is up +6.5% from its Friday lows following its earnings release, in which the company not only passed the test on net interest income (NII), but offered lots of disclosures and assurances about what businesses it was involved with. M&T Bank MTB is up +7.8% today alone from its Q1 results, which displayed the Buffalo, NY-based regional bank doubled its NII in its reported quarter.
At the same time, we’re not batting 1.000: State Street Bank STT is off -9% following its disappointing quarter, which showed drops in NII, deposits and fee revenue. And there are plenty more regional banks reporting this week and beyond. But all things considered, 90% of the first 30 companies of the S&P 500 already reported have beaten earnings estimates. It’s halcyon days for Q1 earnings season, and they won’t remain this stellar. But compared to the collapse that had been forecast from around the financial world? We’re proving to be far better off right now.
We also move on from Finance earnings report into the vast reporting universe this week: Netflix NFLX is out tomorrow after the close, Tesla TSLA is Wednesday, Johnson & Johnson JNJ and Procter & Gamble PG report this week as well, as does American Express AXP. There are also expected results from Bank of America BAC, Goldman Sachs GS and Morgan Stanley MS by the end of the week.
After today’s close, Transportation major J.B. Hunt JBHT reported misses on both top and bottom lines in its Q1 report: earnings of $1.89 per share on revenues of $3.23 billion came up short of the $2.05 per share and $3.45 billion expected in the Zacks consensus. Volume declines, especially in its important Intermodal business, and a decline in shipments from its West Coast ports were behind the quarterly weakness. Shares are down -2% in late trading.
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