Here are the most important news, trends and analysis that investors need to start their trading day:
1. Stocks set to drop as Dow stock JPMorgan falls after quarterly results
Traders on the floor of the New York Stock Exchange, Jan. 13, 2022.
U.S. stock futures accelerated to the downside Friday after Dow stock JPMorgan fell 4% in the premarket as investors parsed quarterly results from the nation’s largest bank by assets. The company’s fourth-quarter per-share earnings of $3.33 and revenue of $30.35 billion, both beat estimates. However, JPMorgan said it took a $1.8 billion net benefit from releasing reserves for loan losses that never materialized; without that benefit earnings would have been $2.86 per share, missing expectations.
This week’s bounce in tech stocks was wiped out Thursday, sending the Nasdaq down 2.5% and the S&P 500 down 1.4%. The Dow Jones Industrial Average, which doesn’t have as much tech exposure, dropped 0.5%. All three benchmarks broke multiday winning streaks. The Nasdaq ended Thursday nearly 8.7% lower than its November all-time high, nearing correction territory. The S&P 500 and the Dow finished 3.3% and nearly 2.3%, respectively, away from their all-time highs last week.
2. Wells Fargo shares flat, Citigroup falls after quarterly results
In addition to JPMorgan, other bank earnings continued to roll in, with Wells Fargo on Friday posting better-than-expected fourth-quarter revenue of nearly $20.86 billion. Shares were relatively flat in the premarket. Results were helped by an $875 million reserve release that the bank had set aside during the Covid pandemic to safeguard against possible widespread loan losses. Wells Fargo also experienced 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 steep profit drop for the fourth quarter. The company’s net income dropped 26% to $3.2 billion. Citigroup cited an increase in expenses for the sharp decline.
3. December retail sales drop much more than expected
The government said December retail sales fell overall 1.9% and excluding autos dropped 2.3%, both were much lower than estimates for a 0.1% decline and 0.3% increase, respectively. The big drops came against a backdrop of shoppers spacing out holiday buying earlier this year due to supply chain concerns as inflation soared. This week, December’s consumer price index rose 7% year over year, matching estimates and the quickest pace since June 1982, and last month’s producer price index rose 9.7% year over year, slightly lower than estimates, but still the largest increase on record.
4. Biden to nominate Sarah Bloom Raskin as vice chair for supervision at Fed
President Joe Biden will nominate Sarah Bloom Raskin to be the Federal Reserve’s next vice chair for supervision, arguably the nation’s most powerful banking regulator, according to people familiar with the matter. She’ll face a confirmation hearing before the Senate Banking Committee, which this week heard from Fed Chair Jerome Powell, nominated for a second term, and Fed Governor Lael Brainard, nominated for vice chair. Biden’s choices for the Fed leadership positions come as central bankers are expected to hike interest rates multiple times this year after tapering concludes. There’s also talk about how to start reducing the Fed’s balance sheet.
5. Supreme Court blocks Biden vaccine mandate for businesses
The Supreme Court has blocked the Biden administration from enforcing its sweeping Covid vaccine-or-test requirements for large private companies. However, the high court did allow a vaccine mandate to stand for medical facilities that take Medicare or Medicaid payments. Disappointed by the ruling on businesses, the president called on states and companies to voluntarily institute shot requirements to protect workers, customers and the broader community. On the health-care workers part of the ruling, Biden said it will save the lives of patients, doctors and nurses.
— Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC’s coronavirus coverage.