🏛U.S Banks' Record Earnings as Inflation Keeps Steady Incline.
U.S Banks released their financial results, banks hit record earnings, even as we saw data show that inflation continues to hit the world's largest economy.
Hey Hisa fan,
The U.S released the much awaited March CPI report, with data indicating that inflation continues to decline. Overall inflation in the U.S has fallen significantly from 9% in the summer of last year to 5% in March, largely due to decreases in oil and food prices.
Gasoline prices fell 4.7% in March compared to February.
Food-at-home costs decreased, including an 11% monthly drop in egg prices.
Core inflation, which is the more stable measure of inflation used by the Federal Reserve to guide monetary policy, rose as expected by 0.4% compared to the previous month, resulting in an annual inflation rate of 5.6%. While this is lower than the peak of 6.6% in September last year, it is still far from the Fed's long-term target of 2%.
A closer look at the CPI report shows that used car prices fell significantly, and the upward pressure on shelter costs eased. However, services prices, especially in the leisure sector such as hotels and airfare, remain high.
U.S Banks Earnings Brief.
JP Morgan Chase Co. reported a 52% increase in earnings, amounting to $12.62 billion or $4.10 per share, during the first quarter of the year. This amount already takes into account losses on securities, which amounted to $868 million. However, if these losses are excluded, the earnings would increase by 22 cents per share, resulting in an adjusted profit of $4.32 per share.
Citigroup Inc., earnings beat Wall Street expectations as it earned more from borrowers paying higher interest on loans. According to the results released on Friday, Citi experienced a 23% increase in its net interest income, which amounted to $13.3 billion. However, the company also allocated $241 million to cover possible losses from loans, which is higher than the $138 million set aside during the same period last year.
Wells Fargo Inc., posted a net income growth of over 30%, nearly reaching $5 billion. The bank attributed this to a 45% increase in net interest income, which is the difference between the money it earns from lending and the money it pays out to its customers. This boost in net interest income was driven by the rise in interest rates. Additionally, the bank's revenue increased by 17%.
Coffee Break
Investing in electricity distributors has been a challenge for several investors across the continent. First of all, there has been lots of government involvements, from ESKOM in South Africa, KPLC in Kenya and even TCN in Nigeria, you can’t just make this up!
Uganda seems to have got it right though, because despite the concessional agreement coming to a close in 2025, investors have refused to give up on Uganda’s Umeme Limited.
As if paying a dividend was not enough, Umeme’s shares have led the NSE in terms of year-to-date performance with a 104% share price appreciation since the year began, a boom to shareholders who hold the cross-listed stock in the NSE & the USE.
Well, KPLC needs to do a benchmarking session on what Umeme get’s right onto shareholders.
Markets.
The benchmark U.S Stock Market indices ended the week higher despite concerns about slowing economic growth. Investors were weighing the impact of inflation, which appeared to be easing more than expected, against signals of a slowdown. Within the S&P 500, industrial and material stocks outperformed while technology stocks lagged behind due in part to the decline of NVIDIA, a chipmaker for graphics and artificial intelligence, from a recent high.
For the short trading week, the Dow Jones Industrial Average was up 1.2% during the week to close the week at 33,886.47 basis points. The other benchmarks were similarly higher, with the S&P 500 adding 0.8% and the Nasdaq up 0.3% to close the week at 4,137.64 bps and 12,123.47 bps respectively.
Local Markets.
Local markets reversed last week’s gains as market dynamics eased following a month of earnings and dividend positioning. The benchmark NSE All-share index (NASI) was down by 2.36% to close the week at 111.56 points from last week’s figure of 114.26 points.
The NSE 20-share Index was also lower, closing the week at 1,613.85 points, a 1.93% decrease from the preceding week’s figure of 1,645.65 points. The NSE 25 Share Index also decreased by 2.05% to close the week at 2,920.59 points from last week’s figure of 2,981.80 points.
The banking sector led in overall market activity, with Equity Group Holdings Plc accounting for 41.37% of the week’s total market activity. The stock was down by 2.20% to KES.44.50 down from KES.45.50 registered in the previous week
The Bonds market was however very active, with the bond market turnover up by 37.38% closing the week with bonds worth KES.8.4 Billion transacted compared to KES.6.0 Billion registered the previous week.
What Top Cowries are we collecting this week?
Tesla Inc [NASDAQ:TSLA] - We maintain Tesla as our top watch for the second week running. Tesla, probably the most watched earning this week. Tesla’s stock has risen more than 70% since the start 2023. Will Tesla beat the consensus Revenue Estimates of $23.38B?
Netflix Inc., [NASDAQ: NFLX] - Netflix becomes the first streaming giant to release their financials this quarter. Netflix will release their financials after market close on Tuesday.Will NFLX maintain the momentum on users?
Bank Stocks - Bank of America Corporation [NYSE:BAC], Goldman Sachs Group [NYSE:GS], Western Alliance Bancorp [NYSE:WAL], Silvergate Capital [NYSE:SI] and Bank of New York Mellon [NYSE:BK] will be releasing their results on Tuesday.
How about you, what stocks are you watching for the week? Let us know on Hisa App.
Disclaimer: The writer of this article owns SCOM 0.00 , HAFR , EQTY 0.72%↑ , NVDA -0.72%↓ & AAPL 2.08%↑ shares. This article does not constitute any investment recommendations. Investors and the general public are advised to do their own research before making any investment decision.