It’s another session beset by volatility, which has been the trend this week this week. Indices are currently near highs of the session as investors received earnings from the number one and number three U.S. banks by assets – JPMorgan (JPM) and Wells Fargo (WFC).

The Ten-Year Treasury Yield (TNX) is continuing to move higher despite a cooler PPI. It is gaining 13.1 basis points and breaking the 4.5% level

Notably, the Dollar Index (DXY) has also sunk lower over the past two days and moved just below the 100 level.

Gold hit a new record as investors flock to safe havens, driven by market volatility.

There are three sectors in the green, with Materials (XLB) leading the way. Consumer Discretionary (XLY) is the laggard, in part due to Tesla (TSLA) pulling the sector lower.

Bank Earnings

Morgan Stanley (MS) and JPMorgan (JPM) raised their provisions for credit loss provisions, while Wells Fargo (WFC) reduced their provisions.

• Morgan Stanley (MS) Provision for Credit Losses: $135M (vs. -$6M YoY & $115M QoQ)
• Wells Fargo (WFC) Provision for Credit Losses: $932M (vs. in-line YoY & $1.01B QoQ)
• JPMorgan (JPM) Provision for Credit Losses: $3.31B (vs. $1.88B YoY & $14.05B QoQ)

Wells Fargo (WFC) cited the decrease in revenues due to lower commercial real estate loan allowances, which were partially offset by higher allowances for industrial and commercial loans. Morgan Stanley (MS) cited their increase was due to growth in secured lending and corporate loans, but also attributed some to, “the impact of a weakening macroeconomic forecast.” JPMorgan (JPM) also raised macroeconomic forecasts as a concern but attributed most of their rise to Card Services.

Interestingly, CEO comments about the Trump tariffs were mixed. Wells Fargo (WFC) CEO notably had a more supportive tune.

“The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and “trade wars,” ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility. As always, we hope for the best but prepare the Firm for a wide range of scenarios.” – Jamie Dimon, CEO of JPMorgan

“We support the administration’s willingness to look at barriers to fair trade for the United States, though there are certainly risks associated with such significant actions. Timely resolution which benefits the U.S. would be good for businesses, consumers, and the markets. We expect continued volatility and uncertainty and are prepared for a slower economic environment in 2025, but the actual outcome will be dependent on the results and timing of the policy changes.” - Charlie Scharf, CEO of Wells Fargo

Banks Big Bang	Revenue	Earnings	Guidance
JPM	Beat	Beat	Higher
WFC	Beat	Miss	Higher
MS	Beat	Beat	Higher

Economic Data

Preliminary Consumer Sentiment for April fell to 50.8 from 57 in March, missing consensus of 54.5. Notably, year ahead inflation expectations rose to 6.7% from 5%, the highest reading since 1981. The five-year inflation expectations also rose to 4.4% from 4.1%.

Have a great weekend!

Comments

I understand the market is reacting in a highly emotional manner; however, the recent BEAR market presents "bargains for buys" particularly in Sectors which are aligned with the current administration goals, such as Energy. Why hasn't there been anything mentioned about potential sectors to watch and consider buying ? Bob Besser on 4/11/2025 1:28:25 PM

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