Marketbites: Bank of America Surpasses Expectations
MARKET PERFORMANCE:
Portfolio Manager Commentary:
Major benchmarks fluctuated as investors assessed the latest batch of key earnings reports. Despite a tough economic environment, Bank of America surpassed first-quarter expectations on the top and bottom lines as rates rose. Johnson & Johnson’s stock fell 2.8% even after the pharmaceutical company beat estimates and raised its 2023 guidance. Elsewhere, Goldman Sachs shares slumped 1.7% after the banking giant reported lighter-than-expected revenue, dragged down by a $470 million hit from its Marcus loans.
Despite Tuesday’s moves, and expectations for declining profits paired with persistent inflation and rising interest rates, earnings season has so far proven resilient. All the major averages are up since the period kicked off. But investors warn that profits topping already low expectations won’t matter to a market staring at a Federal Reserve that’s continuing to tighten into a potential recession.
Chart of the Day:
The past 15 years has been a lousy time to sell life insurance. Now, higher interest rates driven by the Federal Reserve’s inflation-fighting campaign have given the industry a new chance to profit. But many of the big U.S. publicly traded insurers will miss the party. A lot of these life insurers don’t sell life insurance anymore, at least not to American consumers. They gave up the business and their armies of agents when low interest rates hit both their profits and stock prices. Interest rates will have to rise to about 5% to entice the big public companies to sell life insurance again, some consultants and analysts say.
Source: WSJ
What else is happening:
Air guardsman is charged over leaked documents - read here
Evan Gershkovich's family speaks out for the first time since his arrest - read here
Americans pull back on big-ticket purchases - read here
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