Bank Earnings Loom at End of Short Trading Week

Edward Kim  |

If someday they say of me that in my work I have contributed something to the welfare and happiness of my fellow man, I shall be satisfied.
— George Westinghouse, Jr.

On Tuesday, April 13, 1869, 22-year-old engineer and entrepreneur George Westinghouse, Jr., received US Patent number 88,929 for his “Improvement in Steam Power Brake Devices.”

Westinghouse, perhaps best known for developing alternating current systems for power distribution, also made significant advances in railway design and safety, including a rotary steam engine and a device for placing derailed freight cars back on their track.

Prior to Westinghouse, engineers had to apply brakes manually on each railcar in order to stop a train.

His novel brake design used a compressed air and flexible tubing system that enabled train engineers to apply brakes on every car of the train simultaneously. 

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The fail-safe system was designed to automatically apply the brakes in the event of any drop in air pressure.

Westinghouse’s compressed air brake became widely accepted, and the Railroad Safety Appliance Act of 1893 made them a required feature on all American trains.

He received over 360 patents during his lifetime.

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Stock index futures are flat in overnight trading Thursday morning after a market rally on Wednesday that trimmed the losses for the week. S&P 500, Nasdaq 100 and Dow 30 futures have all moved only 0.1% or less as of 5:30 am EDT.

JP Morgan ( JPM) missed estimates Wednesday, posting net income of $8.3 billion, or $2.63 per share, down 42% from Q1 2021. The street was looking for EPS of $2.72. 

The largest US bank added $902 million to loan loss reserves, and CEO Jamie Dimon said the bank sees “significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine.”

Other major banks will report Q1 2022 earnings this morning, including Citi ( C), Goldman Sachs ( GS), Morgan Stanley ( MS) and Wells Fargo ( WFC), beginning at around 7:00am EDT.

Beyond the banks, sentiment feels positive around expected earnings for the first quarter. Delta ( DAL) helped lift airlines Wednesday despite reporting a loss. 

CEO Ed Bastian said Delta has “experienced the highest level of sales and booking activity at any time in our history” over the past five weeks and said that he expects “a very strong summer” for the carrier.

Oil futures are modestly lower this morning, with Brent crude and West Texas Intermediate each 0.4% lower to $108.39 and $103.83 per barrel, respectively, as of 5:30am EDT.

Vitol Group, the world’s largest independent oil trader, said Wednesday that it would stop trading Russian crude and other oil products by the end of 2022. The Dutch energy giant traded 7.6 million barrels of crude and other oil products per day in 2021.

On the economic side on Thursday, we’ll see jobless claims and retail sales this morning at 8:30am EDT.
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An examination of options activity provided by Tradier API shows continued strong interest in Apple ( AAPL) by the bulls. The stock flirted with the $180 level again last week, approaching its 52-week high of $182.94 that was achieved in the first week of trading in 2022.

Also on the bulls’ radar have been Tesla ( TSLA) options. While the stock has consolidated a bit after the sharp run it had in March, expect the options to continue to be squarely in focus ahead of the company’s Q1 earnings release next Wednesday, April 20.

On the bear side of the ledger, we’re seeing significant activity in options of BRC ( BRCC), the veteran-founded coffee company that went public via SPAC merger in February 2022. The stock has risen sharply in the past two months, and traders moved to sell calls aggressively last week.

We continue to see increasing interest in iron condor spreads, a directionally neutral strategy that yields the highest profit in a sideways market with low volatility.

Happy Easter, and Chag Pesach Sameach.

Click to enlarge

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Source: Equities News

Stock price data is provided by IEX Cloud on a 15-minute delayed basis. Chart price data is provided by TradingView on a 15-minute delayed basis.

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