We start a new trading week with plenty on our calendar — hopefully which will offer some new market narratives outside the happenings at the Strait of Hormuz and its effect on global oil prices. After today’s open, we’ll see Existing Home Sales for March, than for the rest of the week we’ll get PPI Tuesday, Imports/Exports for March and Empire State and Homebuilder Confidence for April Wednesday, and Jobless Claims and April Philly Fed Thursday.
In addition, the first full week of Q1 earnings season is upon us. This includes many of the biggest banks on Wall Street, including JPMorgan Chase JPM, Citigroup C and Wells Fargo WFC tomorrow, and Bank of America BAC and Morgan Stanley MS on Wednesday. In other sectors, Johnson & Johnson (JNJ) reports Tuesday, and PepsiCo PEP and Netflix NFLX post results Thursday.
Goldman Sachs Trades Lower After Q1 Beat
Investment bank major Goldman Sachs GS outperformed Q1 expectations on both top and bottom lines this morning, but shares are slipping in the pre-market ahead of the company’s conference call. Earnings of $17.55 per share easily surpassed the $16.34 in the Zacks consensus, with $17.23 billion in revenues improving on the $16.98 billion expected, +14.4% year over year. Fixed Income revenue fell -10% in the quarter, however.
There was no forward guidance in the press release, but we should be seeing more details on the call. Shares are down -4% in pre-market market activity, swinging to negative year to date. This, even though we’ve seen +24% earnings growth from a year ago on the bank’s 11th straight quarterly earnings beat.
What to Expect from the Stock Market Today
Of course, we’re all tallying the fallout from the failed peace talks between the U.S. and Iran over the weekend. Oil prices are up +7% this morning — $104/bbl on WTI and $102/bbl on Brent crude — while early trading in the major indexes is fighting off the lows but still in negative territory (except for the Dow, which is being sandbagged somewhat by Goldman’s earnings: the Dow -465 points, the S&P 500 -33, the Nasdaq -111 points and the small-cap Russell 2000 -14.
The U.S. plans to block the Strait of Hormuz this morning. This may be the most important development of this day’s trading activity. There are plenty of question marks, as the U.S. does not have a coalition of allies assisting with these efforts, but pre-markets appear to be in a wait-and-see mode for now.
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This article originally published on Zacks Investment Research (zacks.com).