Stocks were mixed and risk sentiment was poor Monday. Bank earnings are rolling in, but the market seems focused on other factors relating to the speed of the economic recovery.
The S&P 500 fell as much as 0.3%, with the tech-heavy Nasdaq up as much as 0.3%, before large cap tech socks took a bit of a dip into the red. The 10-Year Treasury yield fell to 0.74% from 0.78%.
JPMorgan (JPM) - Get JP Morgan Chase & Co. Report beat estimates, posting revenue of a bit more than $29 billion. Earnings per share was $2.92 against estimates of $2.23. Net interest income fell 9% to $13 billion, while capital markets revenue — comprised mostly of trading fees — up 30% to $6.6 billion. Investment banking revenue rose 20% year-over-year. The shares initially rose as not only did strong fee-based revenue carry the results through, but the bank set aside no cash for loan losses. The shares fell 0.4% after the market opened. Other banks were down as well.
The JPM earnings report could be viewed as a positive read on the current financial position of the consumer and businesses, but cyclicals like restaurants, airlines and industrials were down, some more than 1%.
Now, investors are grappling with the no-fiscal stimulus likely until after the election and an incrementally diminishing outlook for a vaccine. With small businesses not fully reopened and in need of liquidity, investors are a bit nervous about the continued speed of the recovery in employment and consume spend.