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Wall St eyes higher open after strong JPMorgan, Wells Fargo earnings

Published 14/07/2023, 07:51 pm
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 29, 2023.  REUTERS/Brendan McDermid
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By Johann M Cherian and Bansari Mayur Kamdar

(Reuters) - Wall Street was set to open higher on Friday after three of the country's top lenders including JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) commenced second-quarter earnings for big U.S. banks on a strong note.

JPMorgan Chase gained 2.8% in premarket trading after the largest U.S. lender posted a 67% jump in profit as it earned more in interest from borrowers, while Wells Fargo rose 4.5% after reporting a 57% rise in quarterly profit.

"It was very hard to find anything wrong with JPMorgan’s earnings for Q2 this morning," said Octavio Marenzi, CEO of Opimas.

"Consumer banking was particularly strong, but even investment banking, which has been a problem child over the past year or so, is starting to show signs of life."

Citigroup (NYSE:C) climbed 0.9% after the lender reported better-than-expected earnings for the quarter on the back of gains from its personal banking and wealth management unit.

Other U.S. banks also extended gains in trading before the opening bell.

BlackRock (NYSE:BLK) slipped 0.6% after the world's largest asset manager posted a 1.4% decline in quarterly revenue, hit by the impact of market movements over the past 12 months on its average AUM.

UnitedHealth Group (NYSE:UNH) gained 3.2% after the health insurer reported a quarterly profit above analysts' estimates, as the industry bellwether's expenses came in lower than feared.

Rivals Humana (NYSE:HUM), Cigna (NYSE:CI) and CVS Health (NYSE:CVS) rose between 1.0% and 2.5%.

Overall, earnings for the S&P 500 constituents are seen dropping 6.4% in the second quarter, according to Refinitiv data released at the start of the earnings season.

U.S. stocks are on course for robust weekly gains, with the tech-heavy Nasdaq set for its best week since mid-March.

The Nasdaq and the S&P 500 ended the last two sessions at over one-year highs after data signaled easing price pressures in the United States, adding to hopes that the Federal Reserve could wind up its rate-hiking cycle soon after delivering a widely expected 25 basis point rate increase in July.

Late on Thursday, Federal Reserve Governor Christopher Waller said he is not ready to call an all-clear on inflation and supports two more 25 basis point rate hikes this year.

Investors will also look ahead to a preliminary University of Michigan survey that is expected to show consumer sentiment improved in July.

At 08:17 a.m. ET, Dow e-minis were up 165 points, or 0.48%, S&P 500 e-minis were up 7.5 points, or 0.17%, and Nasdaq 100 e-minis were up 8 points, or 0.05%.

Among other performers, Microsoft (NASDAQ:MSFT) gained 1.9% after brokerage UBS turned bullish on the tech giant, with a "buy" rating.

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 29, 2023.  REUTERS/Brendan McDermid

Activision Blizzard (NASDAQ:ATVI) added 1.6% as the gaming firm along with Microsoft are considering giving up some control of their cloud-gaming business in the UK to appease regulators, according to a report.

AT&T (NYSE:T) shed 1.1% after J.P. Morgan downgraded its rating on the telecom firm to "neutral".

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