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Trends & Analysis
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Trends & Analysis
News

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News

Walmart’s stock hits record high on Q1 results

News

Crude oil rises on US supplies, inflation data

News

Another nice quarter for NVIDIA?

News

Alibaba delivers earnings miss, shares slide

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USD edges lower ahead of key economic reports

News

US big banks kickstart earnings on a strong note

Monday, October 16, 2023

Today’s headlines

What’s happening: US big banks released earnings for the third quarter on Friday.

What happened: US financial institutions started the earnings season on a strong note, topping expectations for the latest quarter.

Major banks said higher interest rates provided a boost to overall profits, despite a slowdown in the economy.

How were the results: All three major US banks reported better-than-expected earnings for the third quarter.

  • JP Morgan Chase posted earnings of $4.33 per share, topping the consensus estimates of $3.96 per share. The bank’s quarterly revenues came in at $39.87 billion, above expectations of $39.63 billion.
  • Wells Fargo reported earnings of $1.48 per share, beating Wall Street expectations of $1.24 per share. Its revenue of $20.857 billion beat estimates of $20.086 billion.
  • Citigroup disclosed earnings of $1.63 per share, surpassing Wall Street views of $1.23 per share. The company recorded revenues of $20.139 billion, topping expectations of $19.27 billion.

Why it matters: While the higher interest rates drove earnings for the US banks, it also raised concerns around rising loan losses and lower margins. The higher interest rates make it harder for consumers to take loans and repay their debts.

Bank stocks have been impacted significantly by higher borrowing costs this year. The S&P 500 Banks index dipped around 9.3% in September on concerns over an increase in longer-term interest rates.

Wells Fargo said average commercial and customer loans had declined versus the second quarter amid higher interest rates and a slowdown in the economy. Citigroup CEO Jane Fraser said she was expecting a continued deceleration in spending. The lender set aside higher money to cover doubtful loans.

JPMorgan Chase, Wells and Citi reported a decline in average deposits during the quarter.

How shares responded: JPMorgan’s shares gained 1.5% to close at $148.00, while Citigroup shares fell 0.2% to settle at $41.43 on Friday. Wells Fargo’s shares climbed 3.1% to close at $40.96 on Friday. Citigroup’s stock lost 0.43% to close at $41.43.

What to watch: Investors will continue monitoring the Fed’s interest rate moves. Markets will also watch the major data releases that indicate the state of the economy.

The markets today

The Canadian dollar will be in focus today ahead of a couple of economic reports

Context: The CAD/USD forex pair gained on Friday, while the yield on benchmark government debt moved lower.

Details: The CAD/USD forex pair had declined on Thursday due to strength in the US dollar. The release of higher-than-expected consumer prices by the US sparked more speculations of the Fed keeping interest rates higher for a longer, lending support to the greenback.

The CAD/USD forex pair recorded gains on Friday despite an overall rise in the greenback. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained 0.07% to 106.67 on Friday.

A surge in price for crude oil, one of Canada’s major exports, lent support to the loonie on Friday. WTI crude oil futures rose by 5.8% to close at $87.72 per barrel in the session.

The CAD/USD forex pair added 0.25% to reach $1.3659 on Friday.

Canada’s government 10-year bond yields declined to 3.932%, while the yield on similar US government benchmark debt declined to 4.5938% on Friday.

The S&P/TSX Composite index fell 0.19% to close at 19,462.86 on Friday, after recording gains earlier in the session.

What to watch: Investors await the release of data on manufacturing sales and wholesale sales from Canada today. Manufacturing sales in Canada are expected to grow by 1% in August, versus a 1.6% rise in July. Canada’s wholesale sales, which rose by 0.2% to C$81.3 billion in July, is projected to rise by 0.4% in August.

Other Markets: US trading indices closed mostly lower on Friday, with the S&P 500 and Nasdaq 100 down by 0.50% and 1.24%, respectively, and Dow Jones index up by 0.12%.

The news shaping the markets

The White House accused North Korea of supplying over 1,000 containers of military equipment and munitions to Russia. The news sent the safe-haven US dollar index lower this morning.


The People’s Bank of China held its interest rate unchanged at 2.50% at its recent meeting, which exerted pressure on the CNY/USD forex pair.


New Zealand’s BusinessNZ Performance of Services Index climbed to 50.7 in September, from 47.7 in the prior month, and sent the NZD/USD pair higher in forex trading this morning.


Saudi Arabia’s wholesale prices rose 0.5% year-over-year in September, following a 0.3% decline in the prior month, which exerted slight pressure on the SAR/USD forex pair.


US University of Michigan consumer sentiment declined to 63 in October, from 68.1 a month ago. This sent the Nasdaq 100 index lower by more than 1% on Friday.

What else to watch today

Germany’s wholesale prices, India’s wholesale prices and total passenger vehicle sales, Italy’s inflation rate, Turkey’s central government budget balance, Eurozone’s balance of trade, US NY Empire State manufacturing index, as well as Brazil’s business confidence and Central Bank of Brazil focus market readout.


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