Stock Market Rally Rises Amid Recession Worries; JPMorgan Headlines Earnings: Weekly Review

The stock market rally generally advanced, but with ups and downs amid rising recession fears. JPMorgan led key earnings reports.

Stock market rallies had a positive, but volatile week. Rising recession fears offset generally lower inflation readings. The Nasdaq grew, the S&P 500 climbed, and Dow Jones reached two-month highs. However, there were few good opportunities to buy. JPMorgan Chase and Citigroup were the clear winners in bank earnings.

UnitedHealth (UNH), however, topped the views but shares fell. Delta Air Lines reported mixed Q1 numbers but provided bullish guidance following American Airlines' disappointing Q1 preliminary results.

Despite some volatility, the major indexes rose despite conflicting economic indicators and key earnings reports. The Nasdaq managed a modest gain, as Thursday's gains offset losses for the remainder of the week. Dow Jones and S&P 500 reached two-month highs. There were not many good opportunities to buy. Treasury yields increased. The dollar fell to its lowest level in two months, but recovered on Friday.

The latest data confirms that the U.S. is heading for a recession. However, inflation pressures are still present, and a rate hike by the Fed remains possible. In March, the consumer price index only rose by 0.1% as energy prices dropped. This lowered the CPI to 5%. The core CPI, however, rose by 0.4%, bringing the core inflation rate up to 5.6%. The Fed is concerned that the Fed's key concern, housing prices, has been largely boosted by services, which have shown a broad increase. In the meantime, new claims for unemployment benefits increased by 11,000 to reach 239,000 during the week ending April 8. The average number of claims over the past four weeks has risen to 245,000, which is now nearly 50,000 higher than it was in late September. According to the newly released minutes of the March policy meeting, Fed staff predicted a "mild" recession later this year because of banking problems.

The larger banks easily beat expectations in their quarterly results on Friday. This was largely due to the surge in net interest income, despite March's panic. JPMorgan (JPM), on the back of a 25% increase in revenue, smashed forecasts by 55%. The bank's earnings per share soared to $4.10. Net interest income soared by 49%, to $20.9 billion. Deposits increased by 2% since the end of 2020. Wells Fargo's (WFC) profits soared 40%, while revenue increased 17%. This was due to a 45% increase in net interest income. Wells Fargo (WFC) increased its provisions for credit losses by 26% in Q4 from $1.2 billion. Deposits fell 2%. After five consecutive quarters of declining earnings, Citigroup (C), Inc.'s earnings increased by 8%. Citigroup (C) has set its revenue for 2023 between $78 billion to $79 billion. PNC Financial, a superregional bank, performed better in March than the majority of midsized banks. PNC's earnings jumped 23%, but revenue fell just short of expectations. Net margins fell compared to Q4 due to higher funding costs. Deposits were up slightly. PNC forecast Q2 revenue would decline by 3% from Q1. This was below expectations.

JPM shares soared on the back of results. Citigroup's stock also rose, and both companies cleared key levels. WFC's stock rose steadily this week while PNC fell to a new low.

UnitedHealth Group's (UNH) revenue rose by 15%, and earnings per share increased 14%. Both were above expectations. UnitedHealth's double-digit growth, which boosted full-year forecasts, is why it has just joined IBD's list of Long-Term Leaders. UNH's stock dropped on earnings, after having risen for six consecutive sessions and nine out of the last 10.

Delta Air Lines' (DAL) Q1 profit fell short of expectations, while revenue increased 37%. This was a big beat. The carrier maintained its full-year forecast and set high expectations for the current quarter, citing record advance bookings during the summer travel season and improved demand for international travel. A day earlier, American Airlines' (AAL) preliminary Q1 results exceeded its previous EPS target but fell short of the consensus. AAL's stock fell, while Delta and other carriers had mixed results.

Triton International's (TRTN) stock soared after Brookfield Infrastructure Partners agreed to purchase the world's biggest lessor of intermodal containers for $13.3 billion in cash and stocks.

Boeing (BA), said 737 Max deliveries and production will be affected in the near future due to a part issue with supplier Spirit AeroSystems. Boeing was expected to increase Max delivery. BA shares and SPR plunged.

Tesla (TSLA), along with other discounters in Israel and Singapore, has cut the prices of most EVs on key European markets. This follows a week of price reductions across the board in the U.S.

WW International (WW), a weight-loss firm, has seen its stock soar after completing a telehealth purchase and an analyst stating that the company is well positioned to capitalize on obesity medications.

Novo Nordisk's (NVO) stock continued to rise after it signed a deal with Aspect Biosciences for the development of new diabetes and obesity treatment using Aspect Biosciences bio-printing technology. The Danish drug giant also boosted its outlook for the full year, citing sales of diabetes drug Ozempic and weight-loss drug Wegovy that were better than expected.

TG Therapeutics' (TGTX), whose new drug Briumvi is used to treat multiple sclerosis, soared in value after an analyst reported a "solid increase" in sales during March.

Shockwave Medical's (SWAV) stock surged after Centers for Medicare & Medicaid Services released a proposed rule outlining three high-paying IVL codes for coronary intravascular. The rule is expected to go into effect at the end of September and would benefit Shockwave, which uses IVL technology in order to "crack", hardened calcium deposits within the arteries.

InMode (INMD), a medical aesthetics company, announced sales and profits for the first quarter that were above consensus on Wednesday. The medical aesthetics firm expects sales between $105.7 million and $105.9 millions, with an adjusted profit per share of 50-51c.

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Weekly Review: Stock Market Rally Amid Recession Fears; JPMorgan Leads Earnings