Wall Street looks set to end the year on a positive note, as traders await next week’s crucial payrolls report. 

1. Goldman continues bank earnings season 

The first quarter earnings season is set to continue this week, with more numbers scheduled from the all-important U.S. banking sector.

JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) got the season off to a lackluster start on Friday, with the three big banks disappointing investors, weighing on Wall Street. 

Goldman Sachs (NYSE:GS) will be in the spotlight Monday, with the influential investment bank set to report its latest results before the opening bell.

Investors will be looking to see what Goldman estimates for net interest income, or the difference between what a bank earns on loans and pays out for deposits, given the prolonged period of higher interest rates.

Additionally, investors will be looking to see if Goldman responds to recent calls for it to split the CEO and chairman roles held by David Solomon.

An independent chair "is nearly always preferable to having a single individual lead both the board and the executive team," influential proxy adviser Glass Lewis wrote earlier this month, reiterating a recommendation from last year.

2. Futures rebound after last week’s selloff

U.S. stock futures edged higher Monday, rallying after the selloff at the end of last week, although any gains are likely to be limited by news of escalating tensions in the Middle East.

By 04:10 ET (08:10 GMT), the Dow futures contract was 155 points, or 0.4%, higher, S&P 500 futures climbed 28 points, or 0.6%, and Nasdaq 100 futures rose by 105 points, or 0.6%.

The main indices closed sharply lower on Friday, with the Dow Jones Industrial Average dropping almost 500 points, or 1.2%, the S&P 500 falling 1.5%, its worst day since January, and the Nasdaq Composite dropping 1.6%.

The losses resulted in the DJIA shedding 2.4% last week, its worst week since March 2023, the S&P 500 sliding 1.5%, its worst week since October 2023, while the Nasdaq Composite Index dropped 0.5%, its third negative week in a row. 

Investors will be digesting the raised tensions in the Middle East after Iran launched drones and missiles on Israel on Saturday night, although risk has been capped after U.S. President Joe Biden told Israeli Prime Minister Benjamin Netanyahu that the U.S. will not take part in a counter-offensive against Iran.

Elsewhere, the quarterly earnings season continues, with results from Goldman Sachs [see above] the highlight, while March retail sales will be the main economic data release. 

3. Apple no longer world’s No.1 phone maker

Apple (NASDAQ:AAPL) appears to have lost its crown as the world’s No.1 phone maker, with data from research firm IDC indicating that Samsung (KS:005930) has regained that spot in the wake of the iPhone maker’s weak first quarter.

Apple's smartphone shipments dropped about 10% in the first quarter of 2024, a period when global smartphone shipments increased 7.8% to 289.4 million units.

Samsung, at 20.8% market share, regained the top spot from Apple, after the U.S. tech giant’s strong performance in the December quarter when it overtook the South Korean company as the world's No.1 phone maker. 

Apple is back in second spot, with 17.3% market share, while Xiaomi (OTC:XIACF), one of China's top smartphone makers, occupied the third position with a market share of 14.1% during the first quarter.

4. Job cuts at Tesla?

Tesla (NASDAQ:TSLA) may be about to announce large scale redundancies as it grapples with worsening sales, according to separate reports from Business Insider and Electrek. 

The reports come after the electric vehicle giant reported a sharp drop in first quarter deliveries, amid weakening demand and increased competition in China, the world’s biggest auto market.

It also set weaker production targets for 2024, and doubts remain over whether it will continue with plans for a low-cost EV. 

The reports indicated that Tesla could announce the layoffs as soon as this week, with the Electrek report suggesting they could be as high as 20%, while Business Insider reported that Tesla had already shortened production shifts for the Cybertruck.

In a note released last week, analysts at UBS revealed that its survey results point to a tougher road ahead for the electric vehicle maker.

The investment bank said that plateauing EV demand and more China competition could impact Tesla's near-to-mid-term growth.

“Given the survey results show outside of China, a continued plateau in EV demand and inside of China, more competition, we view the results as headwinds to TSLA unit growth over the coming years,” stated UBS.

5. Crude retreats despite Iran’s attack on Israel

Crude prices retreated Monday as the limited damage done by Iran’s attack on Israel late on Saturday lessened fears about a wider regional conflict, potentially hitting supply from this oil-rich region.

By 04:15 ET, the U.S. crude futures traded 1.2% lower at $84.61 a barrel, while the Brent contract dropped 1.1% to $89.44 per barrel.

An attack by Iran had been widely expected in retaliation for a suspected Israeli air strike against a top Iranian military commander in Damascus last week, and the crude benchmarks had risen on Friday to their highest levels since October.

“The market had already priced in some form of attack, while limited damage and no loss of life means the potential for a more measured response from Israel. How Israel responds is now the key uncertainty,” said analysts at ING, in a note.

The announcement from the U.S. that it will not take part in a counter-offensive against Iran, has also limited concerns.

Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries, producing over 3 million barrels per day of crude, and a full-blown war with Israel would likely severely hit global supply in an already-tight market.

Source : Economy News by Investing.com / Apr 15, 2024