According to Reuters, analysts expect overall net income for U.S. banks to jump between 60% and 250% from a year earlier, partly as they release a part of "reserves", which means the money they had set aside last year for expected pandemic loan losses.
In Europe, LVMH yesterday reported impressive early-year sales growth. Other European players had sent a positive signal, such as Givaudan or Just Eat Takeaway.
Accelerating economic growth is still carrying stock markets that are jumping from peak to peak as they await the summer and the lifting of restrictions. The scenario that investors were hoping for seems to be materializing, despite the vaccine jitters that separate the world in two. On the one hand, the countries that will reach sufficiently high levels of protection to consider a more or less normal recovery of activity, and on the other, those that will still be entangled in the health crisis in the months to come. In this global shake-up, advanced economies are now clearly ahead of the game. The pace of recovery of the US economy is setting the pace.
The most expected announcement at the beginning of the week, the publication of US inflation for March, did not cause much reaction. The financial community looked really scared of any announcement that could push up US rates. Yesterday, the release of slightly higher than expected inflation did not cause a chain reaction, not even the beginning of a frenzy. Instead, U.S. yields eased. One economist wrote in his post this morning that beyond the short-term noise and posturing of "the market buys the rumor and sells the facts" (or the reverse for bonds), the big macroeconomic mechanisms eventually take hold the way they were supposed to.
Crypto-currencies, a sector that is bubbling and not just because of bitcoin, is above USD 64,000 a penny this morning. Honestly, there are so many digital currencies in circulation and in the making that there is bound to be some breakout at some point. But there will also be winners. It's a safe bet that Coinbase will be one of them. The cryptocurrency trading platform goes public today with a reference price of USD 250. As a pioneer with an already critical size, Coinbase is expected to make some noise with this deal, even without a public offering since it is a direct listing that will allow existing shareholders to pass the torch to new entrants. Coinbase, which has wisely reserved the mnemonic code "COIN" for its operation, will weigh a little more than 65 billion dollars even before the opening of the exchanges. That's the equivalent of the Intercontinental Exchange (the parent company of the New York Stock Exchange), to mention another better-known trading platform.
Today's economic highlights
Eurozone industrial production and weekly US oil inventories are the two main macroeconomic indicators of the day, but it is the speeches of the central bankers that will grab the attention, in particular Christine Lagarde and Jerome Powell. In Singapore, the first quarter GDP was up +0.2%, while economists feared a contraction of -0.5%.
The euro is up to USD 1.1951, while the ounce of gold is up to USD 1742. In the oil market, U.S. light crude WTI is at USD 60.1 per barrel, while North Sea Brent is trading just above USD 64 per barrel. The yield on 10-year U.S. debt has eased to 1.62%. Bitcoin is above USD 64,000.
*JP Morgan Chase gained 1 percent in premarket trading after reporting a sharp increase in quarterly profit on strong performance in its trading and investment banking businesses, as well as $5.2 billion in reversals of provisions for bad loans.
* Discovery is down 4% in pre-market trading after reports that Credit Suisse has put large blocks of the U.S. group's shares on the market as the Swiss bank continues to liquidate positions after hedge fund Archegos Capital defaulted on margin calls.
* Moderna said Tuesday that its COVID-19 vaccine still offered strong protection against the disease six months after a second dose, with more than 90% efficacy against all forms of COVID and more than 95% efficacy against severe forms. In pre-market trading, the company's stock gained 1.5%.
* Pfizer can deliver 10% more doses of its COVID-19 vaccine in the U.S. by the end of May and meet its goal of delivering 300 million doses two weeks early, CEO Albert Bourla said Tuesday on Twitter.