market

Stocks showed resilience; can it last?

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The equity market fell during the early trading session and attempted to recover most of its losses towards the end. The Dow, as we have highlighted several times, remains the hot favourite with value stocks in play.

While the Fed’s monetary tightening policy impact on the economy is the highlight, there is also concern about corporate earnings. There is also comfort from House Speaker Kevin McCarthy, who discussed the debt ceiling matter and highlighted that debt default is not an option.

Let’s get some hands on some of the key earnings highlights.

Charles Schwab- Strong performance

It delivered a reasonably strong first quarter result, but lingering concerns remain about its so-called ” cash sorting” situation. It wasn’t as bad as some would fear, as the brokerage firm had received around $132 billion of core net new assets, which is pretty healthy considering the current economic environment.

Deposits fell to $325.7 billion, a decline of 11% from the prior quarter. This is the main focus as customers shift their assets from low-yield bank accounts to higher-yield options, a scenario called cash sorting in general.

The business is expected to drop by middle to higher single-digit percentage on a year-over-year comparison. They have also stopped share buybacks to preserve cash amid the bank turmoil.

State Street stock dived.

The first quarter result came short of estimates, and net income dropped from $604 million to $509 million. Despite that, the CEO spoke about a resilient business despite “disruption within other parts of the banking industry”.

What’s on the menu today?

First in line is the Building permits at 8.30 pm, we expect a decline from 1.55M to 1.45M.

Then at 1 am, we have FOMC member Bowman speaking, which might shed light on the inclination of the Fed’s members in the next stage of monetary policy.

It is 18 April, Tuesday 9.10 am in Singapore and 9.10 pm in New York. Let us hope for a solid series of earnings, as the market focus on Netflix’s result in the after-hour.