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Stock Futures Advance Ahead of Big Week for Bank, Corporate Earnings

Wall Street stock futures moved higher amid anticipation of more big bank earnings this week. On Sunday, stock futures tied to the S&P 500 climbed 0.16%, or 6.5 points, with the Nasdaq 100 futures increasing by 0.06%. In addition, futures tied to the Dow Jones Industrial Average (DJIA) also advanced 0.13% or 43 points.

The banking sector got off to a commendable start, with heavyweights Wells Fargo (NYSE: WFC) and JPMorgan Chase (NYSE: JPM) surpassing expectations. However, underwhelming data from retail sales revealed a 1% drop-off in consumer spending in March which pulled markets lower late last week.

Stocks remained unaffected throughout last week, as reflected by the rousing performances of the major indexes. For instance, the S&P 500 and Nasdaq Composite were up for the fourth consecutive week, advancing 0.8% and 0.3%, respectively. The Dow was also in green territory for the fourth straight time last week, climbing 1.2%.

Despite the bright optics in the futures’ trajectories, investors have an eye on the banking sector’s health. Quarterly earnings for financial powerhouses such as Charles Schwab (NYSE: SCHW), Bank of America (NYSE: BAC), and Morgan Stanley (NYSE; MS) should prove crucial. The upcoming releases of these banks have taken on such heightened nature due to the ongoing banking crisis. The banking sector is in a tailspin following the sudden collapses of three US banks, most notably Silicon Valley Bank (SVB), last month. The defunct bank sustained a bank run triggered by fears of a looming recession, which plunged it into a liquidity crisis.

Besides the finance giants, a few other noteworthy companies are slated to release their earnings report this week. These include electric vehicle (EV) leader Tesla (NASDAQ: TSLA) and multinational consumer goods corporation Procter & Gamble (NYSE: PG). Furthermore, streaming giant Netflix (NASDAQ: NFLX), pharmaceutical powerhouse Johnson & Johnson (NYSE: JNJ), and United Airlines (NASDAQ: UAL) also report earnings this week.

Johnson & Johnson, Netflix, and United Airlines will report quarterly earnings on Tuesday, April 18th. Meanwhile, Tesla will post  Q2 results on Wednesday, while Procter & Gamble will follow suit on April 21st.

Amid the banking crisis, several influential government voices have weighed in on the debilitating incident. For example, at the end of last month, US President Joe Biden called for stricter banking regulations to safeguard customers and avert a reoccurrence. Biden implored federal regulators to develop concrete measures to protect and strengthen the country’s banking system. In addition, the US President also called renewed attention to his administration’s proposed banking regulation reforms.

More recently, US Treasury Secretary Janet Yellen predicted that banks could become more restrictive with lending following the SVB fallout. As she put it:

“Banks are likely to become somewhat more cautious in this environment. We already saw some tightening of lending standards in the banking system prior to that episode, and there may be some more to come.”

However, Yellen added that any potential tightening of lending practices could nullify the need for further Fed rate hikes.

Stock Futures Advance Ahead of Big Week for Bank, Corporate Earnings

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