US equities positive as investors prepare for earnings: “It’s very difficult to compare earnings figures with a year ago”


New York

The main indices of the New York Stock Exchange rose on Monday as investors prepared for the second quarter earnings season. All three major indices – the Dow Jones, the S&P 500 and the Nasdaq – rose to new highs on Friday.

The first heavy series earnings announcements will be seen tomorrow Tuesday as the largest bank in the United States JPMorgan Chase and a leading investment bank Goldman Sachs report their interim results.

Banks are expected to report good results, as the capital they set aside for credit losses is now flowing into the results. According to news agency Reuters, the four largest U.S. banks set aside a total of $ 33 billion a year ago to cover potential credit losses due to the interest rate pandemic.

Indeed, due to the massive US recovery and recovery checks, losses were kept to a minimum and banks did not suffer the credit losses caused by the pandemic as feared.

Both banks have also pledged to raise their dividends and buy back their own shares when the US Federal Reserve released banks from restrictions on dividend payments and share buybacks after the banks cleared the paperwork of the Fed’s stress tests.

JPMorgan Chase rose 1.4 percent and Morgan Stanley 2.7 percent on Monday.

Analysis service Factsetin The analyst forecast collected by the S&P 500 index shows 64 percent of the net results of companies in the S&P 500 index in the second quarter. The growth rate is projected to be the fastest in a decade. However, investors need to remember that in the second quarter of last year, the businesses of many companies were frozen due to the interest rate pandemic.

“Earnings figures will look strange compared to last year and it will be very difficult to compare them with the figures a year ago,” said Director of Research and Funding. Jay Jacobs ETF company From Global X. commented on The Wall Street Journal.

“I therefore believe that comments on the future prospects of companies will be much more valuable in the eyes of investors than the earnings figures themselves,” he continues.

While stock indices have risen, investors have begun to worry that the economic recovery is slowing. Investors’ concerns are reflected, among other things, in the fact that government bond yields fell sharply last week as investors were concerned about the spread of the delta variant of the coronavirus around the world.

“Stock market sentiment is still positive, but the delta variant is causing a headwind to market sentiment,” said Chief Investment Officer. John Roe finance company Legal & General Investment Managementilta commented on The Wall Street Journal.

The 10-year interest rate on U.S. government debt was on the rise after stock markets closed and was quoted at 1.367 percent.

The Dow Jones index rose 0.4 percent, the broad S&P 500 index rose 0.4 percent and the Nasdaq index rose 0.2 percent.


Source: Arvopaperi by www.arvopaperi.fi.

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