Trump’s war now collides directly with earnings season, and this is putting Wall Street in an awkward position. Investors head into the week asking a key question: Can U.S. companies continue to post strong earnings while conflict in the Middle East drives up energy prices and keeps traders on edge? This is the problem hanging over this part of the reporting, especially with the first big numbers coming from the banks.
So far, earnings expectations have not been broken. Estimates tracked by LSEG IBES through Friday showed the S&P 500 total Profits For the first quarter, an increase of about 14% over the same period last year. If that happens, it will post six straight quarters of double-digit earnings growth, the longest stretch since 2011.
That’s why stocks remain supported even after a month of Iran-related fighting. Investors still see a strong quarter and year, but now they want hard evidence in the numbers.
Markets brace for bank earnings while war, oil and Bitcoin keep trading desks busy
Last week gave traders a break after a truce between the two sides helped risk assets rebound strongly. The S&P 500 rose more than 3.5%. MSCI’s gauge of emerging market stocks jumped 7.4%. Bitcoin It rose almost 10%, which was important to a market audience that was chasing risk whenever war fears subsided even a little.
Oil went the other way. West Texas Intermediate futures were down 13.4% through Friday. Brent price stabilized at $95 a barrel after approaching $112 in March.
The next full trading period begins at 6pm New York time on Sunday, when US stocks, Treasuries and oil reopen. Early trading in Sydney showed some caution. Safe haven demand pushed the US dollar higher against its major counterparts.
Even so, investors have not reacted to the recent collapse in peace talks in the same way as they did in the early days of the war. Japan’s Topix and South Korea’s KOSPI indices trimmed their losses on Monday. Taiwanese Taiks finished the race on a high note. European stocks fell less than 1%.
Some market strategists said traders may view J.D. Vance’s trip home as a pause in the talks, rather than an end to them. Others said Iran still appears open to further negotiations. Even people who think the blockade could bring risk back to markets still say that the ugliest part of war trading may already be over.
The calendar is packed. Monday saw Goldman Sachs earnings, LVMH sales and US existing home sales. Tuesday brings earnings from JPMorgan, Citigroup, and Wells Fargo, along with sales from Kering and Total Energies, Japanese industrial production, the US producer price index, and the International Monetary Fund’s global economic outlook. Wednesday will witness sales from Morgan Stanley, Bank of America and Hermes.
Thursday brings Netflix earnings, Chinese GDP, Chinese retail sales, Chinese industrial production, Eurozone CPI, UK industrial production, US initial jobless claims, US industrial production, and the G20 finance ministers and central bank governors meeting in Washington. Friday brings the Eurozone trade balance.
Goldman posts strong numbers as equity and trade fees rise but fixed income falters
Goldman Sachs kicked things off Monday with first-quarter results that beat expectations, posting earnings of $17.55 per share, ahead of LSEG estimates of $16.49.
The bank’s revenues amounted to $17.23 billion, higher than the expected $16.97 billion. Profits rose 19% from the previous year to $5.63 billion, and total revenues rose 14%.
Goldman Sachs said it had its strongest ever quarter of stock trading, helping deliver the company’s second-highest quarterly revenue ever. Equity revenue rose 27% to $5.33 billion, about $420 million above StreetAccount estimates.
Investment banking also came in strong, with fees rising 48% to $2.84 billion, about $340 million above expectations.
Revenue there fell 10% to $4.01 billion, putting it $910 million below StreetAccount estimates. Goldman said results were hurt by significantly lower revenues in interest rate, mortgage and credit products.
