As the earnings reports season gets underway, some companies hit the mark while others lag behind, causing market sentiment to be mixed and some US stocks to perform poorly.
US Stocks started the day lower yesterday as investors witnessed mixed earnings reports from major corporations.
Bank of America Corp. shares declined 0.60% after reporting results driven by rising interest rates, while Johnson & Johnson fell 2.2% after raising its earnings projection this year, citing new treatments for cancer that will help offset the loss in sales of its older portfolio of treatments.
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The sale of loans at the Marcus consumer unit cost the Goldman Sachs Group $470 million, which caused it to miss revenue projections. As a result, the stock price dropped by 1.50%.
Even though it is still early in the first quarter reporting season, experts have been more bullish despite some poor performances of stocks yesterday. In the quarter, S&P 500 company earnings are predicted to decline 4.8% from a year earlier, as opposed to the previous forecast of a 5.2% decline.
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In addition to earnings, analysts have been considering the Federal Reserve’s (Fed) future move on interest rates. The Fed is expected to hike rates by another quarter-point when it meets in May, despite conflicting economic statistics. Most Fed officials who have spoken out so far support keeping interest rates high for as long as possible as inflation is not significantly falling.
Bond yields predict rate reduction as soon as the end of this year, which is something that doesn't match the shape of the interest rate curve.
The development of market interest rates continues to have a significant impact on the US dollar, which remains stable within a trading range. According to market expectations, the Fed's rate hikes will soon come to an end, and the Dollar will continue its downward trend that started at the end of last year.
Sources: Bloomberg Reuters