US stock futures fluctuate, banks launch earnings season

• US stock market futures fluctuate ahead of session open

• Dow Jones (US30) could retest ATH amid solid earnings

• JPMorgan, Wells Fargo and Citigroup reported earnings today

US stock market futures fluctuate along European equities in mixed trading as investors await signing of ‘Phase One’ trade agreement. Meanwhile, major US banks launched Q4 2019 Wall Street earnings season. Reports from JP Morgan and Citigroup turned out to be better than expected while Wells Fargo disappointed.

Unlike S&P 500 (US500) and Nasdaq (US100), Dow Jones (US30) failed to climb to fresh all-time highs this week. The index seems to have formed a base at the 28800 pts handle and is looking to move higher. Upbeat sentiment towards the banking sector could push the index higher today. In such a scenario, one should focus on the all-time high at 29000 pts as the first potential resistance to watch. However, as the index sits around 0.5% below it, we cannot rule out that we will see a break above it today. In such a scenario, traders should consider 29400 pts handle as the support to watch as upper limit of the upward channel and 161.8% exterior retracement of the downward move started on January 3 can be found there. Near-term support is marked with the shoulder line of SHS pattern from the turn of the year (28700 pts).

Source: xStation5

JP Morgan and Citigroup post solid earnings but Wells Fargo disappoints

JP Morgan (JPM.US) has reported earnings for Q4 2019 ahead of the session start as one of the first major US banks to do so. Bank reported EPS of $2.57, almost 9% above market consensus. Revenue of $29.211 billion was 4,7% higher than market expected. The biggest surprise came from sales & trading revenue as it grew 86% YoY to $3.45 billion while market expected only $2.44 billion. JP Morgan managed to post better year-over-year figures in all major categories except net interest income, which dropped 1.3% YoY.

Citigroup (C.US) also reported results that were much better than the market expected. EPS came in at $1.90 against forecasted $1.84 while revenue of $18.378 was 2.9% higher than expected. Revenue from fixed income trading grew 49% YoY to $2.9 billion. Improvement in EPS also came aimd 10% reduction in average diluted shares outstanding.

Wells Fargo (WFC.US), the third major US lender that reported earnings today, stood in contrast to the two aforementioned lenders. Wells Fargo missed adjusted EPS estimate of $1.11 as its earnings stood at $0.93. Revenue of $19.9 billion was 5% lower than a year ago. Net interest margin in Q4 stood at 2.53% while net interest income dropped 11% YoY to $11.2 billion. However, net interest figures were both in-line with market expectations.

JP Morgan (JPM.US) managed to climb back above the 200-hour moving average by the end of yesterday’s session in a sign that bulls are regaining ground. The stock is indicated to open higher today thanks to a solid earnings report for Q4 2019. The price zone at $139 can be considered the nearest resistance with ATH ($141) being not far above it. Source: xStation5