Bank Shares Sink Dow Jones; Brazil Retail Results Rally Ibovespa

U.S. industrial output decline and the start of results season disappoint investors on Wall Street

Bloomberg Línea — Results season on Wall Street got off to a bad start with large banks disappointing investors, while a surprising fall in industrial output and calls for the Federal Reserve to raise interest rates caused an insipid end to the second week of the year.

The Dow Jones Industrial (INDU) closed 0.56% lower, with the day’s worst performance, dragged down by the fall in banks’ shares, while the S&P 500 (SPX) reversed the trend of recent days and closed with a nominal gain of 0.08% and the Nasdaq Composite (CCMPDL) gained 0.59%, driven up by tech shares as buyers took advantage of lower prices after Thursday’s slump.

JPMorgan Chase (JPM), the largest bank in the U.S. by assets, saw a more pronounced drop in operating revenues than analysts expected and the shares of commercial and retail lenders dropped in comparison to Thursday, according to Bloomberg.


Shares of Citigroup (C) also dropped in value after its fixed income products saw a 20% drop in revenues in third quarter compared with the same period of 2020, which was also worse than analysts had feared, with a 3% drop in revenues despite predictions of an increase.

“US stocks struggled after the big banks had a rough start to earnings season. JPMorgan shares dropped sharply over fears that surging expenses and wage inflation may lead to a greater profit miss over the next couple of years,” Edward Moya, an analyst at Oanda, said in an emailed note.

U.S. industrial output added to the bad news for the economy after falling unexpectedly, a sign that manufacturers continue to face problems due to supply and labor shortages.

Federal Reserve data shows a 0.3% decline in December, following a revised up increase of 0.6% in November, and despite an annual increase of 3.5%. Total industrial output, which also includes mining and public services, dropped 0.1% in December but rose 3.7% year-on-year.


Analysts’ average estimate from a Bloomberg survey was a 0.3% monthly increase and an increase of 0.2% in total industrial production.

Latin America

In Latin America, Brazil’s Ibovespa (IBOV) put in the best performance of the region after retail sales results surprised analysts.

Brazilian retail sales saw a monthly increase of 0.6% in November, the month of Black Friday, while the accumulated increase for the year was 1.9%, although of the eight retail segments analyzed, five saw declines in November.

Colombia’s Colcap (COLCAP) had the region’s worst performance, down 2.37% as the shares of Grupo Empresarial Antioqueño (GEA) had a negative effect, with shares of Grupo Sura (GRUPOSUR) losing 9.83%.

Shares of Grupo Nutresa (NUTRESA) dropped 6.96% in value and those of Preferencial Grupo Sura (PFGRUPSURA) slumped 4.90%.

The Colombian Stock Exchange on Friday handed the Gilinski family 25.25% of the shares of Grupo Sura after the takeover bid that closed on January 11.

This is how the region’s markets and currencies performed on Friday, January 14: