- Scott Peters
- 18 Jul, 2022
- New York City
Bank of America said its latest quarterly results benefited from the rising rate environment.
Bank of America said revenues in the second quarter ending in June net of interest expenses, increased 6% to $22.7 billion.
Net income declined to $5.9 billion or 73 cents a diluted share from $8.9 billion or $1.03 a diluted share.
The bank also took a charge of $523 million for the provision of credit losses.
Total loans and leases at the end of the quarter increased to $1.03 trillion from $918 billion a year ago.
Total deposits increased to $1.989 trillion from $1.909 trillion a year ago.
Non-performing loans declined to $4.1 billion or 0.41% loan loss ratio from $4.9 billion or 0.54% ratio from a year ago.
Consumer Banking
Consumer banking segment revenues increased 12% to $9.1 billion but net income declined 5% to $2.9 billion.
Net income was impacted by higher credit loss provision of $350 billion on loan growth and dampened macroeconomic outlook.
At the end of the quarter, the bank added 241,000 net new consumer accounts totaling 35.1 million and business accounts increased 5% to 3.7 million.
Account balances increased 4% to $1.6 trillion and combined credit and debit card spending increased 10% to $221 billion, 17% increase in credit card and 6% in debit card spending.
Average credit card outstanding balance increased to $81.0 billion from $73.4 billion a year ago.
Global Wealth and Investment Management
Revenues increased 7% to $5.4 billion on higher interest rates and higher balances.
Assets under management decreased 8% to $3.4 trillion reflecting lower market valuation and offset by new asset flows of $53 billion.
Merrill Lynch wealth management unit added 4,500 new household clients and client balances were $2.8 trillion with $1.1 trillion in assets under management.
Total investment banking fees decreased 47% or $994 million to $1.1 billion.
Global Banking
Revenues decreased 2% to $5.0 billion reflecting lower investment banking fees, mark-to-market losses related to leveraged finance positions and lower leasing-related revenue.
These were partially offset by higher net interest income from the benefit of higher interest rates and strong loan growth.
Total investment banking fees (excl. self-led) decreased $994 million, or 47%, to $1.1 billion.
Global Markets
Revenues decreased 5% to $4.5 billion reflecting lower investment banking fees and mark-to-market losses related to leveraged finance positions, partially offset by higher sales and trading revenue.
Sales and trading revenue increased 17% to $4.2 billion driven by 19% increase in fixed income, commodities and currencies trading to $2.3 billion and 2% rise in equities trading to $1.7 billion.
Company and Stock
Bank of America increased 1.1% to $32.64 and extended this year's loss to 30.1%.
Bank of America operates 3,984 centers and the bank's investment units has 650 research analysts covering 3,400 companies, 1,140 corporate bond issuers across 56 economies and 24 industries.
- Barry Adams
- 18 Jul, 2022
- New York City
Bank of America increased 1.1% to $32.64 after the lender benefited from the rising rate environment.
Revenues, net of interest expenses, increased 6% to $22.7 billion and net income declined to $5.9 billion or 73 cents a diluted share from $8.9 billion or $1.03 a diluted share.
The bank also took a charge of $523 million for the provision of credit losses.
Boeing Co increased 4.5% to $154.60 after Delta Airlines placed an order for 100 737 MAX 10 jets.
Coinbase Global increased 16.2% to $62.49 after the Norway based DNB Asset Management purchased share of the cryptocurrency exchange.
DNB initiated position in the company with 13,641 shares in the second quarter, according to a regulatory filing with the SEC.
Delta Air increased 5.4% to $31.70 after the airlines placed its first plane order in about a decade.
"The aircraft will be 20%-30% more fuel efficient than the retiring Delta planes," Delta added in a press statement released at the signing ceremony at the 2022 Farnborough International Airshow.
Nearly one-third of the aircraft
- Barry Adams
- 18 Jul, 2022
- New York City
Stocks on Wall Street advanced and Bank of America and Goldman Sachs reported better than expected earnings.
The S&P 500 index increased 0.8% to 3,896.20 and the S&P 500 index advanced 1.2% to 11,589.56.
Futures of crude oil prices increased $4.23 to $101.86 and natural gas advanced 39 cents to $7.39 a unit.
The yield on 10-year U.S. Treasury notes increased to 2.98%.
Goldman Sachs gained 4.2% to $306.19 after the financial services company said a surge in bond trading revenues helped to offset the weakness in investment banking revenues in the latest quarter ending in June.
Bank of America increased 1.1% to $32.64 after the lender benefited from the rising rate environment.
Revenues, net of interest expenses, increased 6% to $22.7 billion and net income declined to $5.9 billion or 73 cents a diluted share from $8.9 billion or $1.03 a diluted share.
The bank also took a charge of $523 million for the provision of credit losses.
Investors are also awaiting earnings this week from 135 companies including Tesla, Netflix, United Airlines, Union Pacific, Johnson & Johnson, and Verizon.
IBM is scheduled to report earnings after the regular hours trading today.
Boeing Co increased 4.5% to $154.60 after Delta Airlines placed an order for 100 737 MAX 10 jets.
European Markets Rally
European markets advanced following the optimism in New York and on the hopes that natural gas will start flowing again through Nord Stream 1 pipeline network this week.
European investors are also looking ahead at the European Central Bank's policy meeting on July 21 and a rate hike of 25 basis points followed by a 50 basis points increase at its September meeting.
The DAX index increased 0.7% to 12,962.08, the CAC-40 index added 0.9% to 6,90.20, and the FTSE 100 index advanced 0.98% to 7,228.69.
The euro edged up to trade at $1.015.
Investors also looked ahead to the Italian Prime Minister Mario Draghi's address to the parliament this Wednesday.
H & M Hennes & Mauritz AB declined 0.5% to skr 125.60 and the Swedish apparel retailer said it has stopped its retail selling in Russia since March and has started the process of winding down its operation in the country.
GSK Plc declined 3.3% to 1,386.60 after the British pharmaceutical maker completed the spinoff of its $36 billion consumer healthcare business.
Stellantis NV declined 0.3% to 12.0 euros after the Italian automotive group said it will end its joint venture with a company that makes and sells the Jeep brand in China.
Asian Markets Advance
Markets across Asia closed higher after Chinese regulators urged the central bank to provide financial support to real estate developers.
Mortgage boycotts are spreading in China and home buyers in 12 cities are protesting and suspending monthly payments as unfinished residential real estate projects pile.
About 5 million home buyers with more than $40 billion mortgages have suspended payments according to local media reports in China.
As many as one third of recently sold residential units are facing extended delays or lack of progress on construction sites.
China's economy is struggling after two months of severe lockdowns and the continued restrictions in social gathering for more than 250 million people in at least 20 cities.
Shanghai and Tianjin ordered mass Covid-19 testing following its zero-Covid-19 policy.
The fresh outbreak of infections highlights the risks of new lockdowns and slows the economic rebound in the second largest economy of the world.
The Hang Seng Index soared 2.7% to 20,846.18, the Sensex index gained 1.4% to 54,521.15, and the the Kospi average climbed 1.90% to close at 2,375.25
Markets in Tokyo were closed for a holiday.
- Bridgette Randall
- 18 Jul, 2022
- New York City
European markets advanced following the optimism in New York and on the hopes that natural gas will start flowing again through Nord Stream 1 pipeline network this week.
European investors are also looking ahead at the European Central Bank's policy meeting on July 21 and a rate hike of 25 basis points followed by a 50 basis points increase at its September meeting.
The DAX index increased 0.7% to 12,962.08, the CAC-40 index added 0.9% to 6,90.20, and the FTSE 100 index advanced 0.98% to 7,228.69.
Investors also looked ahead to the Italian Prime Minister Mario Draghi's address to the parliament this Wednesday.
H & M Hennes & Mauritz AB declined 0.5% to skr 125.60 and the Swedish apparel retailer said it has stopped its retail selling in Russia since March and has started the process of winding down its operation in the country.
GSK Plc declined 3.3% to 1,386.60 after the British pharmaceutical maker completed the spinoff of its $36 billion consumer healthcare business.
Stellantis NV declined 0.3% to 12.0 euros after the Italian automotive group said it will end its joint venture with a company that makes and sells the Jeep brand in China.
- Scott Peters
- 15 Jul, 2022
- New York City
Citigroup said second quarter revenues increased 19% to $19.6 billion on higher net interest income and strong volumes in the personal banking and institutional clients group.
Net income declined 27% to $4.5 billion on higher cost of credit and an 8% increase in expenses more than offset the 11% increase in revenues.
Diluted earnings per share declined 27% to $2.19 from $2.85 a year ago.
Return on average common equity fell to 9.7% from 13.0%.
Total deposits at the end of the quarter increased 1% to $1.3 trillion and loans declined 3% to $657.0 billion.
At the end of the June quarter, loan loss reserves were $16.0 billion or loan loss reserves of 2.44% compared to $19.2 billion or 2.88% a year ago.
Institutional Revenues Soar 20%
Institutional Clients Group increased 20% to $11.4 billion including higher revenues from loan hedges and partially offset by a decrease in Investment Banking revenues.
Markets segment revenues increased 25% to $5.3 billion driven by higher volatility leading to higher trading activities.
Fixed Income Markets revenues increased 31% to $4.1 billion on higher trading volumes in the rates, currencies and commodities businesses.
Equity Markets revenues rose 8% to $1.2 billion on strong equity derivatives trading.
Investment Banking revenues plunged 46% to $805 million on weak capital market and merger and acquisition activities and the decline in banking was offset by higher revenues in corporate lending.
During the quarter, Citigroup returned $1.3 billion to shareholders in the form of dividends and repurchases.
Personal Banking Revenues Rose 9%
U.S. personal banking revenues increased 9% to $4.1 billion and branded cards revenues increased 10% to $2.2 billion on interest on higher loan balances.
New accounts and card spend volumes increased 18%, while average loans increased 11%.
Retail services revenues increased 7% to $1.3 billion on higher interest on higher loan balances, partially offset by higher partner payments.
Retail banking revenues increased 6% to $656 million on higher deposit spreads and volumes.
Global Wealth Management Revenues Flat
Global wealth management revenues were flat at $1.9 billion were flat on lower investment fee, particularly in Asia, offset by growth in average deposits and loans.
Company and Stock
The 212-year old banking institution Citigroup provides financial services to individuals, corporations and governments and the bank has about 72 million credit card customers.
Citigroup soared 10.5% to $48.52 after the release of earnings and the stock has fallen 20.8% in the year so far.
- Scott Peters
- 15 Jul, 2022
- New York City
Bank of New York said revenues in the second quarter ending in June increased 7% to $4.3 billion driven by an increase of 4% in fees and 28% in net interest income.
Assets under management declined 17% to $1.9 trillion and under custody fell 4% to $43.0 trillion.
Net income declined 16% to $835 million or $1.03 a diluted share from $991 million or $1.13 a diluted share a year ago.
The company lifted its quarterly dividend by 9% to 37 cents a share.
Bank of New York Mellon added 4.8% to $42.37.
- Barry Adams
- 15 Jul, 2022
- New York City
U.S. stocks advanced after retail sales increased more than estimated following a surge in inflation reports earlier in the week.
Retail sales' increase in June was welcomed by investors after two inflation reports earlier in the week showed elevated levels for consumer and wholesale prices.
In volatile trading, stocks climbed higher on the strength in consumer spending and on the hopes that the Fed will lift rates no higher than 75 basis points at its next policy meeting in two weeks.
Investors drove banks higher after Citigroup, Wells Fargo, PNC Financial, and U.S. Bancorp reported earnings.
Banks are benefiting from the rising rate environments but earnings at some banks took a hit on the weaknesses in mortgage and private equity businesses.
Banks are also setting aside more capital to cover losses emerging from bad loans, but there are few signs of impending recession in the bank's results.
Retail sales in June rose 1% from the revised 0.1% decline in May, the Commerce Department reported today.
Sales rose 8.4% from a year ago and in the three month period to June surged 8.1% from the same period a year ago.
Retail sales are not adjusted for inflation which rose 1.3% from May indicating real retail sales fell.
Stocks advanced sharply after the release of strong retail sales data indicating consumers are resilient despite 4-decade high inflation.
Gasoline sales rose 3.6%, sales at bars and restaurants jumped 1%, furniture and home store sales jumped 1.4%, and online sales jumped 2.2%.
The S&P 500 index jumped 1.92% to 3,863.16 and the Nasdaq Composite index edged up 1.79% to 11,452.42.
Futures of crude oil increased $1.79 to $97.57 and natural gas rose 51 cents to $7.11 a unit.
The yield on 10-year U.S. Treasury notes edged down 3 ticks to 2.921%.
For the week, the S&P 500 declined 0.9% and the Nasdaq dropped 1.6%.
European Bond Yields Rise After Italy Plunges In Political Turmoil
European markets advanced following the surge in the U.S. and bond yields were in focus after Italy's prime minister resigned.
Prime Minister Mario Draghi offered his resignation after the coalition partner 5-Star Movement refused to back the government in a no confidence vote on a disagreement with a plan in combating rising consumer prices.
President Sergio Mattarella rejected Draghi's resignation and asked him to address the parliament next week.
Bond market was on alert after Draghi's resignation, and yield on 10-year Italian bonds rose to 3.260%, a one month high and spread with the German bond of similar maturity widened to 2.2% for the second day in a row.
Bond yields in the region edged slightly lower today but remained elevated on the Italian and British uncertainties.
The yield on the 10-year bond of Germany traded at 1.13%, France at 1.73% and the U.K. at 2.091%.
Conservative Party in the U.K. narrowed the list to 6 from 12 contenders to lead the party after the party's parliamentary members revolted against Prime Minister Boris Johnson, forcing his unscheduled departure last week.
The DAX index gained 2.76% to 12,864.72, the CAC-40 index increased 2.04% to 5,962.87, and the FTSE 100 index added 1.7% to 7,159.01.
China's Economy Barely Grew In June
China reported lower than expected economic growth in June quarter.
GDP expanded at 0.4% from a year ago falling well short of expectations between 0.7% and 1.2%, the National Bureau of Statistics said on Friday.
The economic activities fell sharply after months of lockdowns and dragged the GDP growth down from 4.8% annual rate in the first quarter.
The economy expanded at the slowest pace since the first quarter of 2020 when GDP shrank 6.8% after initial outbreak of coronavirus in Wuhan brough the second largest economy to a complete halt.
For the first half, the economy expanded at 2.5% rate well below the annual target rate of 5.5% set by the Chinese government.
Real estate sector continued to drag the economy with property investment dropping 9.4% but retail sales in June rose 3.1% driven by higher automobile sales.
Industrial production also jumped 3.9% from a year ago.
The delays in housing construction has sparked a wave of mortgage boycotts in several cities in the last few days after home buyers refused to pay for unfinished homes.
- Barry Adams
- 15 Jul, 2022
- New York City
BlackRock gained 0.3% to $590.04 after the company said second quarter revenues declined 5% to $4.5 billion from $4.82 billion a year ago.
Net income fell 22% to $1.08 billion or $7.06 a diluted share from $1.38 billion or $8.92 a share.
Assets under management fell 11% to $8.5 trillion from $9.5 trillion a year ago.
Bank of New York Mellon added 4.8% to $42.37 after the company said second quarter revenues increased 7% to $4.3 billion driven by an increase of 4% in fees and 28% in net interest income.
Assets under management declined 17% to $1.9 trillion and under custody fell 4% to $43.0 trillion.
Net income declined 16% to $835 million or $1.03 a diluted share from $991 million or $1.13 a diluted share a year ago.
The company lifted its quarterly dividend by 9% to 37 cents a share.
Citigroup soared 10.5% to $48.52 after the bank said second quarter revenues increased 19% to $19.6 billion on higher net interest income and strong volumes in the personal banking and institutional clients group.
Net income declined 27% to $4.5 billion on higher cost of credit and an 8% increase in expenses more than offset the 11% increase in revenues.
Diluted earnings per share declined 27% to $2.19 from $2.85.
Total deposits at the end of the quarter increased 1% to $1.3 trillion and loans declined 3% to $657.0 billion.
At the end of the June quarter, loan loss reserves were $16.0 billion or loan loss reserves of 2.44% compared to $19.2 billion or 2.88% a year ago.
PNC Financial Services edged up 0.6% to $151.89 after the bank said second quarter revenues increased 9% to $5.1 billion from $4.7 billion a year ago largely driven by 22 basis points increase in net interest margin.
Net income rose to $1.5 billion or $3.39 per diluted share from $1.1 billion or $2.43 a share.
Deposits increased to $446.5 billion from $401.7 billion and loans increased to $304.8 billion from $255.6 billion a year ago.
Pinterest jumped 12.5% to $19.76 on a Wall Street Journal report that activist investor Elliott Management acquired a 9% stake in the company.
State Street traded higher 4.3% to $62.32 after the financial services provider said second quarter revenues declined 3% to $2.95 billion from a year ago.
Net income dropped 2% to $747 million from $763 million a year ago. Diluted earnings per share fell 8% to $1.91 from $2.07 a year ago.
At the end of the quarter, assets under management declined 11% to $3.47 trillion and under custody fell 2% to $38.2 trillion from a year ago.
U.S. Bancorp gained 4.9% to $46.42 said second quarter revenues increased 4% to $6.0 billion from $5.8 billion a year ago.
Net income fell 23.5% to $1.46 billion from $1.91 billion a year ago and diluted earnings per share declined to 99 cents from $1.28 a year ago..
Average total loans in the quarter increased 10.2% to $324.2 billion from $294.3 billion and average total deposits increased 6.4% to $456.5 billion from $429.2 billion a year ago.
UnitedHealth increased 4.9% to $526.82 after the health insurance company said second quarter revenues increased 13% to $80.5 billion.
Net income in the quarter increased to 16% to $5.0 billion from $4.3 billion a year ago. Diluted earnings per share increased to $5.34 from $4.46 a year ago.
The company increased its full year net earnings outlook to $20.45 to $20.95 per share and adjusted net earnings to $21.40 to $21.90 per share
Wells Fargo advanced 7.3% to $41.73 said second quarter revenues declined 16% to $17.0 billion from $20.3 billion a year ago.
Net income fell 48% to $3.2 billion from $3.7 billion a year ago and diluted earnings per share declined 46% to 74 cents from $1.38 a year ago.
Net Interest income rose 16% to $10.2 billion and non-interest income plunged 40% to $6.8 billion from a year ago.
Noninterest income decreased primarily from the weak results in private equity and venture capital business and fall in revenues because of lower origination of mortgage loans and lower gains from the re-securitization of loans purchased from securitization pools.
At the end of the quarter, total deposits increased 1% to $1.444 trillion and total loans rose 8% to $925.6 billion.
- Scott Peters
- 14 Jul, 2022
- New York City
Morgan Stanley dropped 0.9% to $74.26 after the financial services company reported net revenues in the second quarter ending in June fell 11% to $13.1 billion compared to $14.8 billion a year ago.
Net income fell 29% to $2.5 billion or $1.39 per diluted share compared to net income of $3.5 billion or $1.85 per diluted share for the same period a year ago.
Uncertain macroeconomic environment and volatile markets impacted institutional securities revenues.
Segment revenues declined 14% to $6.1 billion from $7.1 billion.
Wealth management segment revenues declined to $5.7 billion from $6.1 billion, negatively impacted by mark-to-market losses on investments associated with certain employee deferred compensation plans.
The business added net new assets of $53 billion in the quarter and $195 billion in the first half of 2022.
Morgan Stanley repurchased $2.7 billion of its own stock and completed its previously announced $12 billion share repurchase program.
The company announced a new $20 billion stock repurchase program and also lifted its quarterly dividend 11% to 77.5 cents payable on August 15, 2022 to common shareholders of record on July 29, 2022.
- Scott Peters
- 14 Jul, 2022
- New York City
JPMorgan Chase declined 3.8% to $107.67 after the bank said second quarter revenues increased 1% to $30.7 billion.
Net income in the quarter fell 28% to $8.64 billion from $11.95 billion and diluted earnings per share fell to $2.76 from $3.78.
Return on equity fell to 13% from 18% and return on tangible equity dropped to 17% from 23% a year ago.
- Brian Turner
- 15 Jul, 2022
- New York City
U.S. stocks advance after retail sales increased more than estimated indicating resilient consumer spending in the face of 4-decade higher inflation.
Retail sales in June rose 1% from the revised 0.1% decline in May, the Commerce Department reported today.
Sales rose 8.4% from a year ago and in the three month period to June surged 8.1% from the same period a year ago.
Monthly sales in May were revised to 0.1% from the 0.3% fall in the previous estimate.
Retail sales are not adjusted for inflation which rose 1.3% from May indicating real retail sales fell.
Stocks advanced sharply after the release of strong retail sales data indicating consumers are resilient despite 4-decade high inflation.
Gasoline sales rose 3.6%, sales at bars and restaurants jumped 1%, furniture and home store sales jumped 1.4%, and online sales jumped 2.2%.
The July 2022 Advance Monthly Retail report is scheduled for release on August 17, 2022 at 8:30 a.m. EDT.
- Bridgette Randall
- 15 Jul, 2022
- Frankfurt
European markets advanced and bond yields were in focus after Italy's prime minister resigned.
Prime Minister Mario Draghi offered his resignation after the coalition partner 5-Star Movement refused to back the government in a no confidence vote on a disagreement with a plan in combating rising consumer prices.
President Sergio Mattarella rejected Draghi's resignation and asked him to address the parliament next week.
Bond market was on alert after Draghi's resignation, and yield on 10-year Italian bonds rose to 3.134%, a one month high and spread with the German bond of similar maturity widened to 2.2% for the second day in a row.
Bond yields in the region edged slightly lower today but remained elevated on the Italian and British uncertainties.
The yield on the 10-year bond of Germany traded at 1.16%, France at 1.77% and the U.K. at 2.098%.
Conservative Party in the U.K. narrowed the list to 6 from 12 contenders to lead the party after parliamentary members of the party revolted against Prime Minister Boris Johnson forcing his unscheduled departure last week.
The DAX index gained 1.76% to 12,754.25, the CAC-40 index increased 0.76% to 5,962.87, and the FTSE 100 index added 1.2% to 7,123.81.
The euro flirted near the U.S. dollar parity and closed at $1.002.
- Barry Adams
- 15 Jul, 2022
- New York City
U.S. stocks advance after retail sales increased more than estimated indicating resilient consumer spending in the face of 4-decade higher inflation.
Market indexes popped at the opening after Citibank and Wells Fargo reported better than expected earnings.
Earnings at both banks fell from a year ago but met investors' expectations and the banks benefited from the rising rate environment.
Retail sales in June rose 1% from the revised 0.1% decline in May, the Commerce Department reported today.
Sales rose 8.4% from a year ago and in the three month period to June surged 8.1% from the same period a year ago.
Retail sales are not adjusted for inflation which rose 1.3% from May indicating real retail sales fell.
Stocks advanced sharply after the release of strong retail sales data indicating consumers are resilient despite 4-decade high inflation.
Gasoline sales rose 3.6%, sales at bars and restaurants jumped 1%, furniture and home store sales jumped 1.4%, and online sales jumped 2.2%.
The S&P 500 index jumped 1.07% to 3,830.46 and the Nasdaq Composite index edged up 1.1% to 11,375.19
European Bond Yields Rise After Italy Plunges In Political Turmoil
European markets advanced and bond yields were in focus after Italy's prime minister resigned.
Prime Minister Mario Draghi offered his resignation after the coalition partner 5-Star Movement refused to back the government in a no confidence vote on a disagreement with a plan in combating rising consumer prices.
President Sergio Mattarella rejected Draghi's resignation and asked him to address the parliament next week.
Bond market was on alert after Draghi's resignation, and yield on 10-year Italian bonds rose to 3.134%, a one month high and spread with the German bond of similar maturity widened to 2.2% for the second day in a row.
Bond yields in the region edged slightly lower today but remained elevated on the Italian and British uncertainties.
The yield on the 10-year bond of Germany traded at 1.16%, France at 1.77% and the U.K. at 2.098%.
Conservative Party in the U.K. narrowed the list to 6 from 12 contenders to lead the party after parliamentary members of the party revolted against Prime Minister Boris Johnson forcing his unscheduled departure last week.
The DAX index gained 1.76% to 12,754.25, the CAC-40 index increased 0.76% to 5,962.87, and the FTSE 100 index added 1.2% to 7,123.81.
China's Economy Barely Grew In June
China reported lower than expected economic growth in June quarter.
GDP expanded at 0.4% from a year ago falling well short of expectations between 0.7% and 1.2%, the National Bureau of Statistics said on Friday.
The economic activities fell sharply after months of lockdowns and dragged the GDP growth down from 4.8% annual rate in the first quarter.
The economy expanded at the slowest pace since the first quarter of 2020 when GDP shrank 6.8% after initial outbreak of coronavirus in Wuhan brough the second largest economy to a complete halt.
For the first half, the economy expanded at 2.5% rate well below the annual target rate of 5.5% set by the Chinese government.
Real estate sector continued to drag the economy with property investment dropping 9.4% but retail sales in June rose 3.1% driven by higher automobile sales.
Industrial production also jumped 3.9% from a year ago.
The delays in housing construction has sparked a wave of mortgage boycotts in several cities in the last few days after home buyers refused to pay for unfinished homes.
- Brian Turner
- 15 Jul, 2022
- New York City
China reported lower than expected economic growth in June quarter.
GDP expanded at 0.4% from a year ago falling well short of expectations between 0.7% and 1.2%, the National Bureau of Statistics said on Friday.
The economic activities fell sharply after months of lockdowns and dragged the GDP growth down from 4.8% annual rate in the first quarter.
The economy expanded at the slowest pace since the first quarter of 2020 when GDP shrank 6.8% after initial outbreak of coronavirus in Wuhan brough the second largest economy to a complete halt.
For the first half, the economy expanded at 2.5% rate well below the annual target rate of 5.5% set by the Chinese government.
Real estate sector continued to drag the economy with property investment dropping 9.4% but retail sales in June rose 3.1% driven by higher automobile sales.
Industrial production also jumped 3.9% from a year ago.
The delays in housing construction has sparked a wave of mortgage boycotts in several cities in the last few days after home buyers refused to pay for unfinished homes.
- Barry Adams
- 14 Jul, 2022
- New York City
U.S. stocks trimmed losses in volatile trading after the wholesale price index jumped and bank earnings disappointed investors.
The S&P 500 index declined 0.3% to 3,790.31 and the Nasdaq Composite index gained 0.03% to 11,251.90.
The volatile energy prices dropped after the release of the wholesale price report on the worries that the economy may slow down faster than estimated and the Middle Eastern nations may keep the elevated supply flowing.
Futures of crude oil prices increased 15 cents to $96.45 and natural gas edged down to $6.67 a unit.
The yield on 10-year notes increased to 2.96%.
The producer price index soared 11.3% in June from a year ago and increased 1.1% on a monthly basis, the Bureau of Labor Statistics reported Thursday.
On a monthly basis, the producer price index increased 0.9% in May and jumped 0.4% in April.
Core producer price index, excluding food and energy, rose 6.4% in June.
Banks were in focus after JP Morgan earnings disappointed investors and the largest bank suspended stock buybacks to preserve capital and lifted reserves for bad loans.
JPMorgan Chase declined 3.5% to $108.00 after the bank said second quarter revenues increased 1% to $30.7 billion.
Net income in the quarter fell 28% to $8.64 billion from $11.95 billion and diluted earnings per share fell to $2.76 from $3.78.
Return on equity fell to 13% from 18% and return on tangible equity dropped to 17% from 23% a year ago.
Morgan Stanley dropped 0.4% to $74.69 after the financial services company reported net revenues in the second quarter ending in June fell to $13.1 billion compared to $14.8 billion a year ago.
Net income fell to $2.5 billion or $1.39 per diluted share compared to net income of $3.5 billion or $1.85 per diluted share for the same period a year ago.
European Markets Drop 2%
European markets extended losses on the worries of faster increase in interest rates and mixed earnings reports.
The DAX index declined 1.9% to 12,519.66, the CAC-40 index fell 1.4% to 5,915.42, and the FTSE index dropped 1.6% to 7,039.81.
The euro dropped to $0.99, the level last seen in 2002.
Benchmark indexes dropped on the worries of rising inflation after the U.S. wholesale prices rose 11.3% stoking the fears of faster rate increases.
The eurozone economic growth in 2022 was lowered to 2.6% from the previous estimate of 2.7% released three months ago, the European Commission said in its summer report on Thursday.
The commission downgraded the outlook citing the surging inflation, ongoing China coronavirus challenges, and continued war in Ukraine.
The estimate of the economic growth in 2023 was also lowered to 1.4% from the Spring estimate of 2.3%.
Germany's growth outlook was lowered to 1.4% and 1.3% and France's estimate was lowered to 2.4% and 1.4% in 2022 and 2023 respectively.
However, Spain's economy is expected to expand 4.0% in 2022 and 2.1% in 1.4% in 2023 and Italy's economy is set to grow 2.9% and 0.9% respectively.
Asian Markets Ease On Rate Path Worries
Market indexes in Asia declined on the worries of global economic conditions and rising inflation.
The Nikkei 225 index increased 0.6% to 26,643.39, the Sensex index declined 0.2% to 53,416.15, and the Hang Seng index fell 0.2% to 20,751.21.
Japan's industrial production fell more than initially estimated in May, the Ministry of Economy, Trade and Industry said on Thursday.
Industrial production fell a seasonally adjusted 7.5% in May from the previous estimate of 7.2%.
Singapore unexpectedly lifted its key lending rate and the central bank revised higher its estimate of overall inflation to between 5.0% and 6.0%from the previous range of 4.5% to 5.5%.
India's trade deficit in June surged nearly three-fold to $26.2 billion from $9.2 billion a year ago.
Exports in June soared 23.5% in June to $40 billion and imports soared 57.6% to $66.31 billion resulting in a trade deficit of $26.2 billion.