Stocks rose Tuesday, after encouraging economic data from China came out, even as bank earnings showed signs of economic stress. Some on Wall Street are cautious,

All three major U.S. indices rose, with the S&P 500 up 2.57%. Investors were a buyer of the 10 year treasury bond, with the yield falling to 0.73%, a defensive signal. 

Chinese exports fell 6.6% year-over-year, beating estimates of negative 14%, indicating global demand is far stronger than expected. 

But JPMorgan  (JPM) – Get Report and Wells Fargo  (WFC) – Get Report reported earnings, with both banks saying the saw large credit loss provisions, an expense on banks’ income statements in which the bank sets side cash for expected credit losses on loans extended. This is an indicator of future credit problems in companies. 

JPMorgan said revenue came in at $29 billion, in line with estimates. The bank cited the growth of its balance sheet, likely involving strong loan volumes, as a major revenue driver, as low interest rates and Federal Reserve lending programs aid the banks’ balance sheet growth. But earnings per share, which contracted hugely year-over-year, was 78 cents against estimates of $1.84. JPMorgan’s loan loss provisions were over $8 billion, rising 22% year-over-year. 

Source link