US stock markets stormed higher overnight. The Dow Jones added 1.6%, with the S&P 500 and Nasdaq outperforming by jumping 1.7% after a series of strong investment banking results.
Once again earnings are driving global equity markets, which is a relief after months of geopolitical and political sentiment changes.
Morgan Stanley & Bank of America surprise, Wells Fargo struggles
Morgan Stanley (NYSE: MS) shares jumped over 2% after smashing expectations for investment banking income, which was 68% higher, and seeing growing asset management flows from wealthy private clients. Revenue fell 1% but the acquisitions of Eaton Vance and e-Trade both contributed strongly.
Bank of America (NYSE: BAC) also topped estimates as profit soared 58% to US$7.7 billion on revenue growth of 12%. Shares finished the day more than 4% higher.
The more traditional bank in Wells Fargo (NYSE: WFC) fell in a bad sign for Australia’s big four, as net interest weakened due to lower loan balances likely a result of higher savings levels. Loan growth also slowed despite the booming property market in what may be a precursor for Australia’s January reporting season.
Meanwhile, shares in Taiwan Semiconductor (NYSE: TSM) were slightly higher after announcing its intention to build a fabrication facility in Japan in a step to reduce future chip shortages.
US stock market movers
Here’s how other popular US shares performed on Thursday.
- PayPal (NASDAQ: PYPL) up 3.9%
- Alphabet (NASDAQ: GOOGL) up 2.6%
- Microsoft (NASDAQ: MSFT) up 2.2%
- Oracle (NYSE: ORCL) down 1.2%
- Airbnb (NASDAQ: ABNB) down 1.8%
- Boeing (NYSE: BA) down 2.0%
Back home on local markets, the S&P/ASX 200 (ASX: XJO) is set to follow this positive lead to open higher on Friday. For all the latest, check out my ASX 200 morning report.