Banking Earnings And PPI Lift Sentiment

Bank of America (BoA) and Goldman Sachs (GS) both announce third-quarter earnings that beat estimates.

Bank of America announced net income of $ 4.9 billion, or 0.51 per share (EPS), with consensus estimates at 0.49 Cents. In the same quarter last year, revenues were at $ 5.8 billion and $ 3.5 billion for Q2 in 2020. The recovery in Q3 was attributable to the reduction in bad loan provisions to only $ 1.4 billion from $ 5.1 billion in Q2.

The GS numbers came out better than consensus, with earnings per share (EPS) at $ 9.68 versus forecast of $ 5.57. Net revenue for the quarter was $ 10.78 billion, versus 9.45 billion previously, up 14% and 30% compared to the same quarter in 2019.

Wells Fargo announced on Wednesday that its third-quarter earnings fell 57%, as the bank’s loan book shrank and net income hurt by near zero interest rates and rising costs.

Net interest loan income for the fourth-largest US bank was $ 9.4 billion, down $ 512 million compared to Q2, as its book shrank 2%. Net revenue fell 14%.

Wells Fargo said the provisions for credit losses associated with loans were $ 20.5 billion, unchanged from the previous quarter.

The bank announced net income attributable to ordinary shareholders of $ 1.72 billion, equivalent to 42 cents per share, for the quarter ended September 30, compared with $ 4.04 billion, or 92 cents per share, before

The US headline producer price index rose by 0.4% in September, with the core rate rising by 0.4%, both of which were higher than expected. Prices recovered from the record lows in April 2019 -1.3% for the headline and -0.4% for the core figure. The 12-month pace increased to 0.4% YoY from -0.2% prior. The base rate rose 1.2% YoY versus 0.6%. Goods prices increased by 0.4% MoM compared to August’s 0.1%, with food prices increasing by 1.2% compared to 0.4% previously, while energy prices decreased 0.3% after a previous -0.1% decline. Services prices rose 0.4% from 0.5% in August.

The US dollar was little changed with the release of mortgage data. The number of mortgage applications decreased by 0.7% last week after a 4.6% rise in the previous week. The average mortgage rate for 30 years decreased from 3.1% to 3.0%, while the mortgage market index fell from 804.7 to 798.

Regarding the Euro, it fell slightly with reaction from investors to Christine Lagarde’s speech and weak industrial production data from the European Union. Lagarde reiterated that the European Central Bank is committed to providing more support to the economy in the European Union and that the bank will review the makeup of the bonds purchased. Data released earlier showed that industrial production in the euro area rose by 0.7% in August, leading to an annual decline of 7.2%.