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S&P 500 Record Run Continues as Banks Set to Kick off Earnings Season

Stock MarketsJul 12, 2021 04:28PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The three major averages closed at record highs as investors looked ahead to the quarterly earnings from major banks as catalyst for further direction.  

The S&P 500 climbed 0.4% to close at a record of 4,384.63. The Dow Jones Industrial Average was up 0.4%, or 126 points to a record close, just shy of the 35,000 level, while the Nasdaq gained 0.2% to new closing record of 14,733.24.

A slew of major Wall Street banks are set to kick off the quarterly earnings season in earnest this week, with JPMorgan Chase & Co (NYSE:JPM) and Goldman Sachs (NYSE:GS) reporting earnings on Tuesday.

The second-quarter wasn't a particularly good quarter for banks against a backdrop of falling interest rates and subdued loan demand compared with a year earlier as consumers are awash with cash.

“For this quarter [Q2], I don't think the banks are going to report substantial loan growth this quarter, at least from the numbers that we're looking at that's put out by the St. Louis Fed,” George Cipolloni a portfolio manager of Penn Mutual Asset Management said in an interview with Investing.com on Monday. “The market might like the announcement of share repurchase from the banks, which could help support the banks through this quarter, even though I don't think we'll get loan growth yet," he added.

Guidance from banks that points to improving net loan to deposit growth will be a key driver to boost investor appetite on banks. “If that dynamic were to change, that would be great for GDP, it would support inflation and higher yields, Cipolloni added. if we see a change net loan to deposit ratio, we'd be very happy with that particular outcome regarding banks,” Cipolloni added.

In tech, semiconductor names helped keep the broader the sector above water following weakness in some of the megacap tech names. 

NVIDIA Corporation (NASDAQ:NVDA), Lam Research Corp (NASDAQ:LRCX)  and ASML Holding NV ADR (NASDAQ:ASML) were among the top gainers with latter up more than 2%.

Microsoft (NASDAQ:MSFT, Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) were lower, while Facebook (NASDAQ:FB) and Google-parent Alphabet (NASDAQ:GOOGL) were above the flatline.

In vaccine news, Johnson & Johnson (NYSE:JNJ)came under pressure on reports the Food & Drug Administration plan to warn that the pharma giant's Covid-19 vaccine is linked to a low risk of neurological disorder.

On the economic front, this week is set to be a market-moving week, with the release of inflation data on Tuesday, and Federal Reserve Chairman Jerome Powell set to take stand before Congress on Wednesday.  

Still, some warn the influx of incoming economic and corporate data as well as potential clues on monetary policy could spark volatile into life. "Whether it is from a change in the Fed policy decision or whether it's because valuations are so high and earnings can't keep up, I think we get a spike in volatility in the short term," Cipolloni said.  

S&P 500 Record Run Continues as Banks Set to Kick off Earnings Season
 

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Comments (13)
TheHauntingTim tim
TheHauntingTim tim Jul 12, 2021 9:25PM ET
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government shouldn't exist
TheHauntingTim tim
TheHauntingTim tim Jul 12, 2021 9:25PM ET
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government shouldn't exist
Yuka Sato
Yuka Sato Jul 12, 2021 9:01PM ET
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test
Mitchel Pioneer
Mitchel Pioneer Jul 12, 2021 5:24PM ET
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The record fraud continues in the biggest investment joke in the world.
Me comment
Me comment Jul 12, 2021 5:24PM ET
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If it is fraud let it continue as I'll keep cashing in. IRA's and other portfolio's are up 21% so far this year, cha-ching.
Patrick Joly
Patrick Joly Jul 12, 2021 5:24PM ET
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You should stop shorting Michel.
Matt Novakovich
Matt Novakovich Jul 12, 2021 5:24PM ET
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I'm down 70% on my shorts. I'm still all in as I was in oil 1 year ago. these writers couldn't hate enough oil until now,,, they love it lol
Mario tragik
Mario tragik Jul 12, 2021 5:00PM ET
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"investors" who are this investors? ALGOS?
Mario tragik
Mario tragik Jul 12, 2021 5:00PM ET
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these**
NUNO LOUREIRO
NUNO LOUREIRO Jul 12, 2021 5:00PM ET
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Absolutely right...
Aleksander Dashi
Aleksander Dashi Jul 12, 2021 4:57PM ET
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Good article!! Thank you
Azizul Zakaria
Azizul Zakaria Jul 12, 2021 4:47PM ET
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👍
Mohsen esmi
Mohsen esmi Jul 12, 2021 4:47PM ET
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mohsenesmi
Mohsen esmi
Mohsen esmi Jul 12, 2021 4:46PM ET
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mohsenesmi
Mohsen esmi
Mohsen esmi Jul 12, 2021 4:46PM ET
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mohsen
عادل یاقوتزاده
عادل یاقوتزاده Jul 12, 2021 4:46PM ET
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Mohsen esmi
Mohsen esmi Jul 12, 2021 4:46PM ET
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mohsen
rajesh halai
rajesh halai Jul 12, 2021 4:41PM ET
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Rajesh Halai
بیوفا ملگری بیوفا ملگری
بیوفا ملگری بیوفا ملگری Jul 12, 2021 4:41PM ET
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