5 things to know before the stock market opens on Friday January 14th

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Business News

Here are the top news, trends and analysis investors need to start their trading day:

1. Stocks will fall as Dow stock JPMorgan falls after quarterly results

Traders on the floor of the New York Stock Exchange, January 13, 2022.

Source: New York SE

U.S. stock futures accelerated lower on Friday after Dow stock JPMorgan fell 4% premarket as investors analyzed quarterly results from the country’s largest bank by asset. The company’s fourth-quarter earnings per share of $3.33 and revenue of $30.35 billion both beat estimates. However, JPMorgan said it took a net gain of $1.8 billion from the release of loan loss reserves that never materialized; Without that benefit, earnings would have been $2.86 per share, falling short of expectations.

This week’s rally in tech stocks was wiped out on Thursday, sending the Nasdaq down 2.5% and the S&P 500 down 1.4%. The Dow Jones Industrial Average, which isn’t as heavily tech-biased, fell 0.5%. All three benchmarks broke multi-day winning streaks. The Nasdaq closed nearly 8.7% lower on Thursday from its November all-time high and nearing correction territory. The S&P 500 and Dow ended last week down 3.3% and nearly 2.3% off their all-time highs, respectively.

2. Wells Fargo stocks flat, Citigroup falls after quarterly results

Banking earnings continued to pour in alongside JPMorgan, with Wells Fargo reporting better-than-expected fourth-quarter revenue of nearly $20.86 billion on Friday. Shares were relatively flat in the premarket. The results were helped by a release of $875 million in reserves that the bank had set aside during the Covid pandemic to protect against potential widespread loan losses. Wells Fargo also saw 5% growth in loans from its consumer and commercial portfolios in the second half of 2021.

Citigroup shares fell more than 3.7% on Friday after the banking giant reported a sharp fall in fourth-quarter earnings. The company’s net income fell 26% to $3.2 billion. Citigroup cited increased spending for the sharp decline.

3. December retail sales fall much more sharply than expected

The government said retail sales fell 1.9% overall and 2.3% excluding autos in December, both much lower than estimates for a 0.1% and 0.3% decline respectively. The big declines came amid buyers skipping Christmas shopping earlier this year due to supply chain concerns as inflation rises. This week December’s consumer price index rose 7% yoy, in line with estimates and at the fastest pace since June 1982, and last month’s producer price index rose 9.7% yoy, slightly less than estimated but still the largest increase since records began.

4. Biden will appoint Sarah Bloom Raskin as Vice Chair of Fed Oversight

President Joe Biden will nominate Sarah Bloom Raskin as the next deputy supervisor of the Federal Reserve, arguably the most powerful banking regulator in the country, according to people familiar with the matter. She will face a confirmation hearing before the Senate Banking Committee, which was heard this week by Fed Chair Jerome Powell, who has been nominated for a second term, and Fed Governor Lael Brainard, who has been nominated for vice chair. Biden’s decisions for Fed leadership positions come as central bankers are expected to hike rates several times this year once tapering is complete. There is also talk of how to start reducing the Fed’s balance sheet.

5. Supreme Court blocks Biden’s corporate vaccine mandate

The Supreme Court has blocked the Biden administration from enforcing its sweeping Covid vaccine or testing requirements for large private companies. However, the Supreme Court allowed a vaccination mandate for medical facilities that accept Medicare or Medicaid payments. Disappointed with the ruling on companies, the President called on states and companies to voluntarily adopt gunfire regulations to protect workers, customers and the broader community. As part of the ruling for healthcare workers, Biden said it will save the lives of patients, doctors and nurses.

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