Bank Earnings Buoy Wall Street

Bank Earnings Buoy Wall Street

U.S. stock markets are higher today after sharp sell-offs across the board last week. 



Bank Earnings Buoy Wall Street
Bank Earnings Buoy Wall Street

Strong results from the investment bank Morgan Stanley have given financial stocks a lift. Near midday, the Dow Jones Industrial Average was up 0.63% and the S&P 500  was up 0.57%, while the Nasdaq composite index gained 0.36%.

Today Delta Air Lines kicked off the airline industry’s earnings season. Investors had been looking forward to the airlines’ results almost as much as passengers have come to dread flying some airlines. Investors were not disappointed. Delta reported a bigger fourth-quarter profit, citing falling fuel prices. Delta expects fuel to be even less expensive in the first quarter of 2016.

In the immediate aftermath of the news, Delta shares rose 3.5%. Analysts have forecast that all three of America’s main carriers – American, Delta and United – will all report record annual profits, based on the price of fuel being roughly half of what it was two years ago. Jet fuel makes up around 30% of airline operations costs. Other factors buoying the airline sector are recovering economic growth and flat air fares – this, however, is a point of contention with consumer groups. There appear to be dark clouds amassing as a Department of Justice investigation starts to look into alleged price rigging between the big three airlines. A cover story in this week’sBloomberg Businessweek titled “United’s Quest to Be Less Awful” hasn’t helped matters, but may not deter investors.

In global news, European stocks snapped a three-day decline, rising for the first time since they entered a bear market last week. All 19 industry groups climbed, with commodity producers and energy companies leading gains.

Today also marks the start of the annual World Economic Forum in Davos. This year’s theme is the “fourth industrial revolution,” futurist code for accelerating technological change. The more than 2500 attendees will have much to discuss including Iran, Trump’s rise in the polls, the oil sector’s woes, and China’s slowdown perhaps being linked to the inevitable change from industrial to service economy. Iranian President Hassan Rouhani spoke to a packed auditorium at the gathering, a first for an Iranian leader, in an effort to normalize relations with Western countries, saying, “Come and visit Iran to see the investment opportunities." Iran’s oil is once again for sale, but with the already glutted market, Iran must diversify its economy and win new economic partners. 


This information has been prepared by Nadex, a trading name of North American Derivatives Exchange, Inc., prepared by independent third parties contracted by Nadex or reproduced form third party news agencies. In addition to the disclaimer below, the material on this page does not contain an offer of, or solicitation for, a transaction in any financial instrument. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.