Stock Market Today: Banks Go Off; Apple to $2 Trillion?

We had a trio of new record highs in the stock market today. That’s as the SPDR S&P 500 ETF (NYSEARCA:SPY), the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) and the PowerShares QQQ ETF (NASDAQ:QQQ) all notched new highs on Tuesday, led higher by the banks.

With that being said, news headlines were able to rattle the cage a bit, as stocks slipped in afternoon trading. Chinese officials flew in to Washington, D.C. this week in order to sign phase one of the trade deal. However, reports surfaced saying that, despite the deal, the U.S. would maintain its tariffs until after the 2020 presidential election.

That caused some obvious knee-jerk reactions in the session, given that the market has had few excuses over the past few months to sell off. The trade deal has been in place for a while now, stocks have been breaking out and the only issue for a moment was Iran, with tensions dissolving just as quickly as they intensified.

Will the latest news lead to more selling? Unless there’s more substance to the report or further escalation in play, it’s unlikely to play as much of a role as earnings.

Earnings Lead Off

On Tuesday morning, earnings season officially got underway.

JPMorgan (NYSE:JPM), the best-in-breed bank, delivered as bulls expected. Earnings of $2.57 per share topped estimates by 22 cents, while revenue of $28.3 billion grew 8.4% year-over-year and beat estimates by $610 million. That said, it couldn’t quite take out its un-adjusted 52-week high of $141.10, despite rallying over 2% at one point on the day.

While JPMorgan failed to hit new highs, Citigroup (NYSE:C) was able to do so after earnings. Earnings of $1.90 per share beat estimates by 7 cents, while revenue of $18.4 billion grew 7.4% year-over-year and beat estimates by $430 million. Branded cards and momentum in digital deposits helped drive Citi’s results.

Unfortunately, Wells Fargo (NYSE:WFC) is not enjoying the same type of day in the sun as its peers. While the others were able to deliver top- and bottom-line beats, WFC missed on both accounts, sending shares lower by roughly 5%. Earnings of 93 cents per share on revenue of $19.9 billion missed by 17 cents and $250 million, respectively. Sales fell 5.3% year-over-year.

Delta Air Lines (NYSE:DAL) is closing in on its 52-week high of $63.44 after rallying about 3% on better-than-expected fourth-quarter results. Earnings of $1.70 per share smashed expectations by 31 cents, while sales of $11.4 billion grew 6.5% year-over-year and beat estimates by $70 million.

Up next?

Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), U.S. Bancorp (NYSE:USB) and PNC Financial (NYSE:PNC) report Wednesday morning, while Alcoa (NYSE:AA) reports after the close.

Movers in the Stock Market Today

Can Apple (NASDAQ:AAPL) climb to a $2 trillion market capitalization? A few years ago (and even 12 months ago), that question would have seemed absurd. A year ago, Apple had a $699 billion market cap. Today that figure stands at $1.4 trillion. Given how valuable it already is, a move to $2 trillion by the end of 2021 at least seems possible. Still, it will require the iPhone maker to see its market cap increase by roughly 45%. That’s a big ask, and it’s what Wedbush analysts expects it to do.

Pinterest (NYSE:PINS) shares exploded higher on Tuesday, rallying some 10% after the company passed Snap (NYSE:SNAP) in users. The former grew its users 9% in 2019 to 82.4 million, according to eMarketer. That passed Snap’s user base of 80.2 million, which grew 6% year-over-year, according to the firm. Pinterest is now third behind Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB).

FedEx (NYSE:FDX) caught a late-session boost, rallying on news that Amazon (NASDAQ:AMZN) has ended its ground-delivery ban on the logistics company. While shares are rallying, investors aren’t blind to the fact that it came during the holidays.

Visa (NYSE:V) is paying $5.3 billion for Plaid, a software startup that is privately held. Given the role that apps and technology are playing in personal finance, the deal isn’t too surprising. Particularly after PayPal (NASDAQ:PYPL) dropped about $4 billion for the Honey app in November.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL, AMZN, V and PINS. 

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