Stocks bounced back from early weakness, while gold and silver rallied, after the Consumer Price Index (CPI) fell 0.4% in June. Treasuries rallied and the dollar sank, even as crude oil gained.
“Big Finance” is blowing the cover off the ball this earnings season! Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), and the other big banks and brokers reporting second quarter profits today all blew estimates away. Even formerly struggling Wells Fargo & Co. (WFC) topped estimates as markets-focused businesses thrived and the company shed more than 7% of its workforce.
GS, JPM, BAC, WFC, IBM (YTD % Change)
Data by YCharts
JPMorgan profit surged 41% to a record $21.2 billion, or $7.70 per share, on a 28% rise in revenue. Even stripping out gains tied to equity investment sales, it beat forecasts. BofA topped earnings per share estimates by nine cents as stock trading revenue soared 70% and investment banking fees jumped 68%.
For its part, Goldman reported $7.4 billion in equities trading revenue – more in three months than it made in a whole year as recently as 2019. Goldman stock was up 20.1% year-to-date heading into the Q2 reporting season, while Wells Fargo stock was down 4.9%. Despite the blockbuster results, financial stocks are mostly flat to lower due to muted forward guidance.
On the flip side, tech and consulting powerhouse International Business Machines Corp. (IBM) missed the mark by a wide margin. The company warned of weaker-than-expected Q2 sales and earnings, blaming shifting customer spending patterns and problems related to the rollout of its z17 mainframe product. IBM stock plunged more than 20% in response, its worst one-day rout since the 1980s.
Finally, crude oil prices are climbing again after the biggest single-day surge for Brent futures since 2020. The 10% pop followed more Iranian attacks on ships in the Strait of Hormuz – and President Trump’s announcement that he’d reimpose a blockade on Iranian shipping. Both Iran and the US are claiming they should control the Strait and receive compensation for ensuring safe passage of energy and other cargoes.
