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US pre-mkts: Bank earnings strong, Cat upgrade

Thursday Oct 14 2021 11:28

2 min

Table of Contents

1. US pre-market key pointers
1.1 Bank of America (BAC)
1.2 Wells Fargo (WFC)

Very strong bank earnings coming through this morning – JPM led the way yesterday and the latest numbers from peers also look strong. Real good signs of improving loan growth in particular is a positive for BAC.

US pre-market key pointers

Bank of America (BAC)

Strong performance from Bank of America.

Net income of $7.7bn, EPS of $0.85 vs $0.71 expected
Revenues up 12% year-on-year – JPM was just up 2.2%
Net interest income up 10% to $11.1bn – most rate-sensitive of the big banks
Record M&A activity – Noninterest income up 14% to $11.7bn, driven by record asset management fees, strong investment banking revenue and higher sales and trading revenues
Expenses down on the quarter, flat on the year
$624m clawback from bad loan provisions – bottom line flattered less than the JPM numbers.
Stock up pre-mkt to tune of 2.5%, having fallen 0.92% yesterday in sympathy with JPM, which is trading mildly higher in pre-mkt.

Wells Fargo (WFC)

Wells Fargo results showed:

Net income of $5.1bn, EPS $1.17 vs $0.98 expected
Net interest income was down 5%, due to lower loan balances that reflect soft demand, also higher prepayments, lower yields
Results include $1.7bn decrease in credit loss provisions – equivalent to $0.30 per share.
Pre-mkt trades +1%, having slipped 1.3% yesterday.

Meanwhile, ahead of the cash open on Wall Street, US futures indicate all the major averages will open higher. SPX seen opening up 30+pts at just under 4,400, Dow Jones +200pts at 34,610, NDX at 14,900. Risk looking solid.

Walgreens Boots Alliance reported earnings $1.17, vs $1.02 expected, revenues $1bn ahead of expectations, cost-cutting programme a year ahead of schedule. US comparable sales up 8.1% from a year before.
UnitedHealth shares +2% pre-mkt after reporting earnings beat and raised guidance.
Caterpillar +1% pre-mkt, bouncing of its weakest level since Jan, as Cowen advises clients to buy ahead of the first ‘megacycle’ in 14 years, initiates with ‘Outperform’ rating and PT of $241.
Tesla shares are up pre-mkt to their best level in 7 months.
Boeing down 1% pre-mkt after report says co. dealing with new Dreamliner defect, production problems
FTSE 100 at HOD just a whisker under 7,200
Dollar continues to struggle. GBPUSD making a fresh 3-week high at 1.37334.
Gold also trades at HOD at $1,800, sitting on its 100-day SMA.
Treasury yields lower, 10s at 1.532%

Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.

US pre-mkts: Bank earnings strong, Cat upgrade

US pre-market key pointers

Bank of America (BAC)

Wells Fargo (WFC)

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