Markets Defused gives an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- US bank stocks a mixed bag on earnings Friday
- Trump meme stock rallies after latest Biden gaffs
- Musk’s X under fire in EU over blue ticks
- Carpetright on verge administration
US bank stocks a mixed bag on earnings Friday
Friday brought the first wave of big-bank results in America, with the financials very much presenting a mixed bag for the sector.
In the market Bank of New York Mellon Corp (NYSE:BK, ETR:BN9) rose more than 5%, whilst Wells Fargo & Co (NYSE:WFC, ETR:NWT) fell more than 5.6%, Citigroup Inc (NYSE:C) fell just under 2% and JP Morgan (JPMorgan Chase & Co (NYSE:JPM, ETR:CMC)) was down 0.6%.
BNY Mellon reported a strong second quarter with revenue of $4.6 billion, surpassing estimates of $4.52 billion. The company reported an adjusted earnings per share (EPS) of $1.51, beating the expected $1.43. Its net income increased by 10% year-over-year to $1.143 billion. Total deposits were significantly higher than anticipated at $304.31 billion.
The company announced a 12% increase in its dividend.
Citigroup reported quarterly financial results at the top end of Wall Street expectations with Q2 revenue of $20.14 billion, slightly above the forecast of $20.07 billion. Net income was $3.22 billion, a 10% increase from the previous year.
Earnings per share (EPS) were reported at $1.52, higher than the $1.39 expected. Investment banking revenue surged by 60% to $853 million, and equities trading revenue increased by 37% to $1.5 billion. However, revenue from the fixed interest business declined by 3% to $3.6 billion.
Wells Fargo reported lower-than-expected net interest income, on Q2 revenue of $20.69 billion, exceeding the estimated $20.28 billion. Net income was $4.9 billion, with an EPS of $1.33, beating the analysts' estimate of $1.29.
JPMorgan Chase announced record-breaking Q2 earnings with revenue of $50.99 billion, surpassing the estimate of $49.98 billion. The net income was $18.1 billion, and the EPS was $6.12. Investment banking revenue increased by 46%, and Banking & Payments revenue rose by 9%.
Trump meme stock rallies after latest Biden gaffs
The share price of Trump Media & Technology, which market commentators see as a ‘meme-stock’, traded up around 4% on Friday – in the aftermath of President Joe Biden's NATO news conference.
Biden's performance at the NATO summit included several gaffs, such as mistakenly introducing Ukrainian leader Volodymyr Zelensky as "President Putin" and referring to Vice President Kamala Harris as "Vice President Trump."
It has sparked increased calls for Biden to withdraw from the upcoming presidential election due to concerns about his age and mental fitness.
DJT stock is majority owned by former President Donald Trump, and the price of the company that owns the Truth Social social media has loosely followed the sentiments towards Trump and his current Presidential campaign – albeit, some market commentators describe it simply as a “meme stock”.
In 2024 to date, DJT stock is up 71% and on Friday has a stock market valuation of just under $6 billion.
In its own right, DJT is still seen as a ‘a niche player’ in the social media market when compared to Facebook, Instagram and X.
Musk’s X under fire in EU over blue ticks
Elon Musk’s social media platform, X, has been warned by the European Union (EU) over its blue tick verification system.
It sees the social media firm become the latest ‘big tech’ to be on the receiving end of the EU’s ire, after Microsoft and Apple were scrutinised.
The EU's preliminary findings allege that X's practices are deceptive and violate the Digital Services Act (DSA).
Specifically, it said that blue ticks, which can now be purchased by any user, mislead people about the authenticity of accounts and allows malicious actors to deceive users easily.
It added that the investigation also found that X failed to provide necessary data for research and lacked transparency in its advertising practices.
According to EU rules, X could potentially face fines of up to 6% of its global revenue.
Carpetright on verge administration
Troubled British retailer Carpetright is reportedly on the verge of going into administration, which would put at risk the jobs of some 1,800 employees.
It has around 10 days to secure sufficient financial support to secure the future of its 272 stores across the UK.
Whilst it continues to operate, the company will no longer give cash refunds, but would instead give customers alternative products.
If it proceeds into administration it will go under the supervision of PwC.