More Bank Earnings — Earnings seasons continued strong yesterday, with the headliners all coming in clutch to back up J.P Morgan’s tease from Wednesday. Bank of America, Citi, Morgan Stanley, and Wells Fargo, to name a few, all showed similar trends like slow loan growth and insane M&A activity.
We talk more about BofA below, but spoiler alert: things are going well. Others, especially Citigroup, are absolutely hyped. Citi saw a 48% jump in overall profits, largely driven by record setting trading revenue in equities as well as continued strong performance in fixed income. The firm beat expectations on both top and bottom line and CEO Jane Fraser was a calming voice around notorious difficulties Citi has had in regard to following the rules. Morgan Stanley kicked ass too, beating on top and bottom lines as well, on account of strong investment banking and asset management results.
The KBW National Bank index gained 1.3% and questionable reports detail bank CEO’s plans to up spending on their respective firm’s cocaine supplies. Life is good.
PPI — While consumer inflation via the CPI rips upward, producer inflation via the PPI hasn’t exactly gotten the message. The PPI, which measures price increases in final demand products that aren’t components of other products, rose by just 0.5% against predictions in the range of 0.6%-0.7%. Roughly 50% of the increase came from energy prices alone, of course. This slowdown in PPI growth has economists scratching their heads, although I can’t imagine why, as they get basically everything wrong, but it is weird given supply chain troubles and the aforementioned energy crisis. To be fair, the PPI rose 8.6% against that of last year, so maybe they did get the message but just decided to chill out a little bit.
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