HomeBusinessHere's what's happening in the markets: April 12

Here’s what’s happening in the markets: April 12

ETF investment instruments

The markets are in the red today after three major banks reported their quarterly results before the bell on Friday.

JPMorgan Chase reported an increase on both the top and bottom lines, with first-quarter profit rising 6% to $13.4 billion. Despite the setbacks, Jamie Dimon, chairman and CEO of JPM, highlighted future concerns, noting: “Looking ahead, we remain alert to a number of significant uncertain forces… there appear to be a lot of persistent inflationary pressures that are likely to persist. “

Wells Fargo and Citibank both reported declines, but not as sharply as Wall Street expected. Bank ETFs fell due to the disappointing reports. XLF, the SPDR fund for selected financial sectorsdecreased by 1%.

The banking sector has remained robust as higher interest rates have increased profit margins for the financial sector. Year to date, XLF is up almost 11%. But today’s reports highlighted that higher interest rates could create headwinds in the future.

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XLF YTD performance

Source: data from etf.com

Blackrock also reported quarterly results before the bell on Friday, with an increase in both profit and revenue. Blackrock’s assets under management (AUM) rose to a record $10.5 trillion, while revenue rose 11% on higher fees and strong market performance.

Blackrock ETFs continue to perform well, with Blackrock’s largest ETF, IVV, the iShares Core S&P 500 ETFis up more than 9.5% so far this year as markets have continued their bull run.

While higher interest rates have generally provided a boost to the financial sector, the “higher for longer” interest rate environment poses challenges. Higher interest rates are sending consumers elsewhere for better returns on savings accounts offered by smaller banks, while many seeking loans for financial products like mortgages have opted to stay on the sidelines and wait for interest rates to come back down to earth.

Inflation concerns have been at the forefront this trading week after the Consumer Price Index (CPI), released on Wednesday, revealed persistent and persistent inflation trends.

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Investors are currently predicting that the Fed won’t cut rates until the July policy meeting at the earliest, which will continue to put pressure on real estate and fixed income ETFs.

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