Good morning all,
Battle of the Banks and Inflation Trends on Both Sides of the Atlantic
Key Earnings Reports: JPMorgan, BlackRock, Citigroup, and Wells Fargo release quarterly results.
Inflation Data: CPI figures from December unveiled in both the UK and the US.
Quantum Computing Stocks: Recovering losses after recent sell-offs.
Retail Sector Woes: Challenges persist amid weaker consumer sentiment.
Meta’s Workforce Reduction: Cost-cutting measures intensify.
Market Movers
RGTI (Rigetti Computing Inc): ▲ 47.93% to 8.95
GME (GameStop Corp): ▼ -10.12% to 27.88
XPEV (XPeng Inc ADR): ▲ 6.77% to 12.61
SIG (Signet Jewelers LTD): ▼ -21.66% to 58.00
News Highlights
Banking Sector in Focus
JPMorgan Chase (JPM)
Reporting Time: Before market open.
Expectations: EPS of $4.09 and revenue of $41.91 billion, marking significant growth from the previous year.
Key Drivers:
Net interest income gains.
Robust capital market activities.
Steady asset management revenue.
Market Sentiment: Strong performance expected to continue.
Citigroup (C)
Reporting Time: Before market open.
Expectations: EPS of $1.22 and revenue of $19.51 billion, reflecting a major turnaround.
Focus Areas:
Investment banking fees, anticipated to rise by 30%.
Wells Fargo (WFC)
Reporting Time: Before market open.
Expectations: EPS of $1.27 on revenue of $20.38 billion, both lower than last year.
Challenges:
Declining earnings and revenue.
Investors may remain cautious.
Quantum Computing Stocks Surge
Quantum computing stocks rebounded sharply:
Rigetti Computing: Up 47.93%, though still 58% below its January high.
D-Wave Quantum: Gained 23.5%, but remains 58% off its December peak.
IonQ: Added 6%, yet 46% below its January high.
Arqit Quantum: Up 7.6%, still 65% below late-December levels.
While the sector remains volatile, sharp price movements present speculative opportunities.
Movers & Shakers
XHB (SPDR S&P Homebuilders ETF): ▲ 2.93% to 106.71
Homebuilders rose nearly 3%, though still 25% below their October highs.
META (Meta Platforms Inc): ▼ -2.31% to 594.25
Meta announced plans to cut 5% of its workforce, targeting underperformers. CEO Mark Zuckerberg emphasised performance optimisation in 2025.
LLY (Eli Lilly & Co): ▼ -6.59% to 744.91
Declined after reducing revenue forecasts for weight-loss and diabetes drugs.
XRT (SPDR S&P Retail ETF): ▼ -0.87% to 77.48
Retail stocks face ongoing struggles, with key players like Macy’s, Gap, and Simon Property Group seeing declines.
What to Watch
UK Inflation Data (Dec 2024)
Forecasts:
CPI: Up 0.1% MoM and 2.6% YoY.
Core CPI: Expected to drop to 3% (from 3.5%).
Market Impacts:
GBP: Volatility likely if inflation deviates from expectations.
Gilts: Higher inflation could push yields upward, delaying rate cuts.
FTSE 100: Could see a drop if inflation surprises to the upside.
Retail Stocks: Particularly sensitive to inflation metrics.
US Inflation Data (Dec 2024)
Forecasts:
CPI: Expected to rise 0.4% MoM and 2.9% YoY.
Core CPI: Likely to increase 0.3% MoM and 3.3% YoY.
Market Impacts:
USD: Likely to strengthen if inflation exceeds expectations, influencing Fed policy.
Treasury Yields: Could climb, delaying anticipated rate cuts.
S&P 500 and Nasdaq: Higher inflation may weigh on equities.
Gold: Prices could rise as a hedge against unexpected inflation.
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