JP Morgan misses forecasts; US markets to open little changed

Summary:

• US indices little changed ahead of the opening bell

• Government shutdown shows little sign of ending

• JP Morgan called to open lower after 1st earnings miss in 15 quarters

After a decent push higher overnight during the Asian session, US indices have pared back those gains and now trade little changed ahead of the opening bell. On the whole the markets remain supported but continue to extend higher, with the resistance zone in the US500 from 2599-2624 now clearly defined. As traders await the key Brexit vote in the UK this evening (likely between 8-9PM) the political situation in this US remains at an impasse with the government shutdown breaking more unwanted records and showing little sign of ending anytime soon.

Looking back at previous shutdowns there does appear to have been some short term downwards pressure on markets with the S&P500 returning an average -0.4% in the past 20 occurrences. However, there doesn’t seem to have had a lasting negative impact with an average 12 month return after the shutdown ended.   

Banks have been in focus this week as they report their results for the 4th quarter and before this afternoon’s cash session JP Morgan have delivered a pretty downbeat set of figures. The bank missed on both the top and bottom line with revenue of $26.1B below the $26.7B expected and EPS of $1.98 significantly lower than the consensus analyst forecast of $2.21. This is the 1st time in 15 quarters that JP Morgan has missed profit expectations.

“Despite a challenging quarter, we grew markets revenue in the investment bank for the year with record performance in equities and solid performance in fixed income,” CEO Jamie Dimon said in the earnings release. In his remarks, Dimon also addressed the U.S. political dysfunction that is now threatening to slow economic growth: In 2019, “we urge our country’s leaders to strike a collaborative, constructive tone, which would reinforce already-strong consumer and business sentiment. Businesses, government and communities need to work together to solve problems and help strengthen the economy for the benefit of everyone.”

The stock is called to open lower this afternoon and has fallen by almost 3% in the pre-market.

JP Morgan is called to open lower by almost 3% this afternoon after the bank posted a disappointing set of results. Price has recently recovered back to the 38.2% fib of the large decline but could now be set to move lower once more. Source: xStation