MARKET AT 7
Good evening. Wall Street's biggest banks just handed in the report card every earnings season promises and rarely delivers: one bank missed, one smashed expectations, and nobody can agree what either result means for the economy. Back home, Australian banks didn't wait to find out. They sold off anyway, even though none of the US drama actually touches their books.
MARKET AT 7
Mixed US bank earnings drag ASX banks lower
Mixed US bank earnings drag ASX banks lower
JPMorgan posted a profit of $15.3 billion, or $5.57 a share, up from $14.4 billion a year earlier but short of the roughly $5.93 Wall Street expected, its first miss in close to three years, Fortune and the Associated Press report. A slowdown in bond trading was the main drag. CEO Jamie Dimon pointed to "sticky inflation, elevated asset prices, rising interest rates" as risks building beneath an otherwise solid economy. Goldman Sachs went the other way, posting $5.29 billion in profit, or $17.01 a share, smashing the $13.02 analysts expected as equities-trading revenue jumped 72% to $6.44 billion, TheStreet reports. Citigroup's profit rose 40% and beat forecasts too. Wells Fargo's $5.95 billion profit also beat estimates, but soft revenue sent shares down in early trading, 24/7 Wall St. put the drop at 3%, Fortune and the AP at 1.5%.
None of that is an Australian bank's problem, yet the ASX 200 fell 0.6% to 8,727.90 on Wednesday, with financials down 1.4% after three straight sessions of gains, Mining.com.au reports. Commonwealth Bank slid 2.2%, and the other big three fell between 0.2% and 1.8%. Bell Direct's Grady Wulff said the real issue is domestic: a deteriorating earnings outlook for Australian banks, with high borrowing costs and a slowing housing market squeezing the households that fund their profits. Miners fell 0.9%, led down by gold producers; energy rose 0.8% on firmer oil, with Santos up 1.4% to its highest close since November 2014. New Zealand's S&P/NZX 50 added 0.1% to 13,760.39.
ALSO TODAY
China's trade surplus hits $938 billion for the year so far. September exports rose 36.3% from a year earlier, the fastest pace since February, pushing the month's surplus to $133.5 billion and the January-to-September total to $938 billion; the Associated Press reports analysts expect the full year could top 2025's record $1.2 trillion. Semiconductor exports alone are up 108.1% this year. The figures land days after the EU agreed to halve Chinese hybrid-car imports, the same deal that's been pressuring lithium stocks on the ASX this week.
Glencore makes its ASX trading debut. The mining giant's CHESS Depositary Interests, a way for an overseas-listed company's shares to trade on the ASX, opened at $11.44, a small premium to its London close, before slipping to end the day at $11.23, Mining.com.au reports. It's a secondary listing alongside Glencore's primary one in London, giving local fund managers direct access to a stock they'd otherwise have to buy overseas.
Korea's Kospi posts a sixth straight loss as its rebound fades. The index closed down 0.44% at 6,008.81, after rallying as much as 2.57% intraday, as foreign investors sold for a seventh consecutive session, the Korea Times reports. Samsung Electronics rose 0.65% but SK Hynix fell 1.66%, with Middle East tension, doubts over OpenAI's revenue, and the same Chinese chip-rival threat from this week's memory-chip rout all cited as drags.
THE MARKET WRAP
OUR TAKE:
Goldman beat hard and jumped. JPMorgan missed by a few cents and barely moved. Wells Fargo beat on profit and fell anyway, because the number that spooked traders was revenue, not earnings per share. Investors have stopped reacting to whether a bank "beat" and started digging into which line actually moved.
Australian banks got caught in the mood regardless; Commonwealth Bank falling 2.2% has nothing to do with Goldman's trading desk. The more interesting number today wasn't a bank's at all. China posted a trade surplus big enough to challenge last year's record, built on a 108% jump in chip exports, while markets spent the day fixated on a handful of Korean memory makers having a bad week. Guess which one actually reshapes the global economy.