US STOCKS – Easing Rate-Hike Bets, Bank Earnings boost Wall Street


U.S. stock indexes went up on Monday after earnings from major banks exceeded profit expectations, extending last week’s good momentum amid dwindling wagers on a massive interest rate increase by the Federal Reserve.

Goldman Sachs Group Inc (NYSE:GS) acquired 2.5% as it revealed a smaller-than-anticipated 48% decline in second-quarter profit, aided by its fixed-income trading strength. Additionally, Bank of America Corp (NYSE:BAC) rose 0.4% after having beaten quarterly profit estimates. Gains in their shares contributed to a 0.6% increase in the S&P 500 banks index during a mixed second-quarter earnings season, in which trading operations flourished as a result of market volatility and helped offset the majority of investment banking’s weakness. 

Partner at Cherry Lane Investments, (CHERB:SS) Rick Meckler said, “You’re getting the feeling that perhaps all the bad news is out of the way and investors are looking to see if this would be a reasonable entry point,” partner at Cherry Lane Investments.

At 12:44 p.m. ET, the Dow Jones Industrial (INDEXDJX:DJI) Average was up 149.36 points, or 0.48%, to 31,437.62, while the S&P 500 was up 28.58 points, or 0.74%, to 3,891.74, and the Nasdaq Composite was up 157.69 points, or 1.38%, to 11,610.11. The technology sector index of the S&P 500 increased by 1.2%, with chipmaker Nvidia Corp (NASDAQ:NVDA) having gained 6.2%.

Following comments from Fed officials last week that the policymakers could stick to a 75 basis point rate hike, fears of a larger 1% point rate hike at the end of July diminished. Next week’s earnings from large technology companies will be closely scrutinized, as their stock prices have been under intense selling pressure for the majority of this year. 

Jack Ablin, chief investment officer at Cresset Capital Management said that he thinks growth stocks will probably outperform (in the second half) as we have the peak in interest rates and perhaps some disappointment on the growth side. He also stated that they also have to recognize that the Fed will be quick to pivot and could actually be easing in the first half of next year.

Delta Air Lines Inc.’s announcement that it would purchase 100 MAX 10 jets for approximately $13.5 billion at list prices, with options to purchase an additional 30 jets, boosted Boeing Co.’s stock price by 2.1%. Delta’s stock appreciated by 5.9%. With earnings season in full swing, analysts now anticipate a 6% year-over-year profit growth for the S&P 500 in the second quarter, down from 6.8% at the start of the quarter, according to data from Refinitiv. As crude prices increased by more than $4, the energy sector index of the S&P 500 increased by 2.5%.

On the NYSE, advancing issues outnumbered declining ones by a ratio of 3.58 to 1, while on the Nasdaq, the ratio was 2.67 to 1. The S&P index recorded one new 52-week high and thirty new lows, whereas the Nasdaq recorded 25 new 52-week highs and 44 new lows.

Goldman Sachs Group Inc

The Goldman Sachs Group, Inc. is a global financial institution that offers a variety of investment banking, securities, investment management, and consumer banking services to corporations, financial institutions, governments, and private individuals. Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management are the four segments through which the business operates. The Investment Banking segment comprises financial advisory services, underwriting, and corporate lending. 

The Global Markets segment includes fixed income, currency and commodities (FICC), and equities, as well as intermediation and financing activities. The Asset Management segment provides clients with investment services designed to preserve and grow their financial assets. Consumer & Wealth Management offers a variety of wealth advisory and banking services, including financial planning, investment management, deposit taking, and lending.

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