U.S. Stocks Mixed on Earnings Anxiety but Trump’s Labor Market is Outshining His Predecessor’s

The U.S. stock market finished mixed-to-lower on Thursday, as trade volumes fell by a fifth ahead of high-profile bank earnings in the final session of the week.

Dow, Nasdaq Slide

All of Wall Street’s major indexes finished well off session lows, as downward pressure was contained by a sharp drop in trading activity.  After losing nearly 100 points through the afternoon, the Dow Jones Industrial Average closed down 14.11 points, or 0.1%, at 26,143.05.

The technology-focused Nasdaq Composite Index also headed lower, sliding 0.2% to finish at 7,947.36.

The broad S&P 500 Index of large-cap stocks edged pared losses in the final hour to finish flat at 2,888.32. Losses were mainly concentrated in health care, which fell 1.2% as a sector. On the opposite side of the spectrum, industrials, financials and utilities rallied sharply.

Earnings Spotlight

Quarterly earnings will dominate headlines on Friday with JPMorgan Chase & Co (JPM) and Wells Fargo & Co (WFC) due to report. JPMorgan is scheduled to report adjusted earnings per share of $2.35 on revenue of $28.47 billion. Both top- and bottom-line results are expected to undershoot year-ago levels.

Meanwhile, Wells Fargo is likely to report adjusted per-share earnings of $1.10 on revenue of $20.99 billion. If those forecasts hold, that would mark a 14.6% increase in profitability but a 4.3% drop in revenue.

The odds were stacked against the big banks this past quarter, as declining mortgage rates and an inverted Treasury yield curve weighed on operations. Q1 2018 will also be tough to follow given the sharp drop in economic growth in the last few quarters.

A parade of Dow blue chips are scheduled to report their financial results on Monday, including Citigroup Inc. (C), Goldman Sachs Group Inc. (GS) and IBM Corp (IBM).

Trump Presides Over Best Labor Market in Five Decades

The U.S. labor market continued to tighten last week, as the number of Americans filing for first-time unemployment benefits plunged to the lowest level since 1969.

Initial jobless claims, a proxy for firings in the labor market, fell by 8,000 to a seasonally adjusted 196,000 in the week ended April 6, the Department of Labor reported Thursday. Analysts in a median estimate had expected jobless claims to rise to 211,000.

The four-week average for jobless claims, which removes week-to-week volatility, fell 7,000 to 207,000, also a five-decade low.

For all the criticism lobbed at Donald Trump for his handling of trade negotiations and the economy, he is presiding over the strongest labor market in decades. Although fewer firings and steady job creation were also seen during the Obama era, it’s the sharp increase in hourly wages that puts Trump’s labor market on a different level. Average hourly earnings, a primary measure of wage inflation, have reached nine-year highs at the start of the fourth quarter.

Featured image courtesy of Shutterstock. Chart via Stockcharts.com.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi