Daily Market Color

S&P Drops from Record Highs as Earnings Season Kicks Off

Tech shares halt another S&P record
Record profits within some of the largest investment banking businesses in the U.S. were not enough for the S&P to close at another record high, as declines in tech stocks weighed on major indices. On the economic data front, the Fed’s beige book release showed the economy continues to strengthen, while businesses started to increase prices between February and early April. Rates increased slightly across a flattening curve, with the 10yr UST yield closing 2bps higher at 1.63%.
Import prices increase highest in nine years
Import prices increased in March for the fourth consecutive month. The import price index increased 1.2% in March with economists expecting a 0.9% increase. Over the past twelve months, import prices have climbed 6.9%, the fastest pace since 2012.
Loans down at big banks in 1Q
J.P. Morgan and Wells Fargo were the first big banks out of the gate to report 1Q 2021 earnings this morning. Both J.P. Morgan and Wells Fargo reported contraction within their loan portfolios compared to the prior-year period at 4% and 15%, respectively. The banks saw both commercial and household loans decline during 1Q, although earnings were helped by a significant reduction in the bad loan provisions that were initially set aside for Covid-related defaults.  Bank managements’ guidance was more optimistic with a historical level of consumer savings and opening economies fueling belief that loan demand will pick up in the second half of 2021

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